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US stocks drop on Greece, China liquidity fears

Wall Street stocks fell in early trade Thursday as worries about Greece and tighter Chinese trading requirements offset news of Avago Technologies's $37 billion acquisition of fellow chipmaker Broadcom.

About 35 minutes into trade, the Dow Jones Industrial Average was at 18,094.49, down 68.50 points (0.38 percent).

The broad-based S&P 500 dropped 7.39 (0.35 percent) to 2,116.09, while the tech-rich Nasdaq Composite Index fell 22.12 (0.43 percent) to 5,084.48, retreating from Wednesday's record close.

Trade has been volatile this week with strong gains Wednesday essentially reversing sharp losses in the prior session.

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A market note from Charles Schwab attributed Thursday's drop to "waning" optimism about talks between Greece and creditors and worries about tighter margin requirements in Chinese markets. The benchmark Shanghai Composite Index fell 6.5 percent.

Meanwhile, investors weighed the merger of Avago and Broadcom, which will create a leader in the surging market for mobile devices like smartphones and tablets with a market value of $77 billion and revenue of $15 billion.

Broadcom fell 3.5 percent, while Avago lost 2.2 percent. Broadcom had surged 21.5 percent on Wednesday as news broke of the impending deal.

Big-box retailer Costco Wholesale fell 1.2 percent as revenues for the quarter ending May 10 came in at $25.52 billion, below the $26.63 billion forecast by analysts.

Apparel and accessories retailer Express jumped 7.0 percent after reporting first-quarter earnings of $13.1 million, more than double the level a year ago. Comparable sales rose by seven percent.

Cybersecurity company Palo Alto Networks jumped 4.3 percent after forecasting sales of $252-256 million in the current quarter, more than the $247.67 million projected by analysts.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.14 percent from 2.13 percent Wednesday, while the 30-year advanced to 2.89 percent from 2.87 percent. Bond prices and yields move inversely.