Bond strikes three days as economic worries mount (Reuters)

NEW YORK (Reuters) - weak economic figures increased anxiety of investors on the prolonged rally, hit U.S. shares lower for a third day Wednesday.

Recent winners in the energy and industrial sectors have been affected more and a key indicator of the concern of investors has increased for a fourth day in what some say is the departure of weakness extended to stocks.

"I think that there is a chance that we have the top in the year," said Doug Kass, founder and President of Seabreeze partners management in Palm Beach, Florida.

"Investors would have erred on the side of conservatism and increase their cash flow positions,", he added.

The S & P energy sector (.)(PSE), up to about 12% through 2011, fell 1.6% Wednesday, while materials (.)(GSPM) fell to 1.7 per cent and industrial (.)(PCG) lost 1.4 percent. Component of Dow Caterpillar Inc. (CAT.)(N) lost by 2.2 per cent to $110.77 Wednesday but is still up to 18.3% for the year.

Reports show activity in the vast U.S. services sector has slowed and the hiring by private companies is lower than expected in April. The new index commands in survey managers to purchase reached its lowest level since December 2009.

Versions "call into question the notion distributed on the rise of a self-sustaining, smooth recovery," said Kass.

Data has also been cautious ahead of report jobs of Friday in April, one of the most closely watched U.S. economic indicators.

The Dow Jones industrial average (.)(DJI) lost 83.93 or 0.66%, to 12,723.58 points. The Standard & Poor 500 Index (.)(SPX) fell 9.30 points, or 0.69%, to 1,347.32. Nasdaq Composite Index (.)(IXIC) dropped by 13.39 points, or 0.47%, to 2,828.23.

CBOE volatility index (.)(VIX) rose by 2.3% at 17.08 for an increase of more than 17% over the last four sessions.

moves its momentum in the short term to the positive for the first time in addition to a month.

"This is the problem area, a new movement potential increase in the VIX," says Larry McMillan, President of McMillan analysis Corp. in a report. "More it holds over 16, grows the more the danger (to the stock market).".

In the news of the deal, chip manufacturer of equipment Applied Materials Inc. (AMAT.)(O) offered to purchase rival Varian Semiconductor Equipment Associates Inc. (VSEA).(O) for $63 per share to get its hands on the new technology to meet stronger demand for smartphones and solar equipment.

Varian shares sweeping 51.3 61.36% $, while Applied Materials fell 1% to $15,09.

Chip equipment maker Novellus Systems (NVLS).(O) a stir-fry 6.5 32.92% $.

ConAgra Foods Inc. (CAG).(N) has raised its bid to Ralcorp Holdings Inc. (RAH.)(N) to $86 per share in cash of $82.

Shares of ConAgra past 3.1 per cent to $25.51, then that Ralcorp, owner of the mark of Post cereals, is increased from 4.9% to $87.39.

Of approximately 8.6 billion shares listed on the stock exchange New York, NYSE Amex and Nasdaq, the largest volume since March 18 and especially the way 7.74 billion shares traded on a daily basis until 2011. Volume was lower than estimated daily average of 8.47 billion in last year.

Results outnumbered losers on the NYSE by a ratio of more than 2 to 1, while on the Nasdaq, more than eight stocks fell for every three have increased.

(Reported by Rodrigo Campos; additional reports by Leah Schnurr and Doris Frankel;) (Editing by Kenneth Barry)

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