U.S. stocks slipped on Wednesday on worries that Greece's debt crisis could spread to other euro zone nations, but losses were pared as some investors looked for bargains a day after a hefty sell-off.

Doubts about Europe's plan to rescue Greece and fears its debt problems could hinder global growth drove investors to safe-havens, boosting U.S. Treasuries and driving down European stocks and the euro.

European leaders warned the euro zone debt crisis could spread beyond Greece, and Moody's Investors Service said Portugal could be next to have its debt downgraded.

In a potentially positive sign, the German parliament's budget committee approved a draft law on Germany's contribution to a financial aid package for Greece. The news coincided with an earlier bounce in stocks.

The focus right now is primarily on how this is going to play out in Europe, how much damage is going to be done, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co, in San Francisco.

How this gets resolved will tell the rest of the euro countries that are under pressure, 'Here are the parameters for help.'

Resource and industrial stocks, sensitive to the outlook of global economic growth, weighed on the market. Energy shares were also pressured as the price of oil fell nearly $3 to $79.87 a barrel.

The S&P Energy Index <.GSPE> was down 1.5 percent and Chevron Corp shares eased 1 percent to $79.99.

The Dow Jones industrial average <.DJI> fell 77.02 points, or 0.70 percent, to 10,849.75. The Standard & Poor's 500 Index <.SPX> lost 7.48 points, or 0.64 percent, to 1,166.12. The Nasdaq Composite Index <.IXIC> was down 21.59 points, or 0.89 percent, to 2,402.66.


Declining stocks outnumbered advancing shares by 3 to 1 on the New York Stock Exchange.

Even so, Wall Street's losses were modest compared with Tuesday's more than 2 percent decline. Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles, said traders were looking for buying opportunities generated by the volatility.

Bigger picture, U.S. investors continue to be of the opinion that corrections are to be bought, said James.

Big-cap consumer staples names were among the winners on the Dow, including retailer Wal-Mart Stores Inc , up 1.3 percent at $54.73 as it rose for a second straight day, and Coca-Cola Co ,up 0.8 percent to $53.57.

Protests in Greece against the government's planned austerity plan turned violent. Protesters clashed with police as tens of thousands of strikers marched, and three people died when rioters set a central Athens bank ablaze.

The flight from risky assets pushed up the U.S. dollar <.DXY>, considered a safe-haven investment, and the greenback gained 0.8 percent against a basket of major currencies.

Data on the U.S. private sector job market and the economy's services sector were generally positive and cushioned the negative tone.

The Institute for Supply Management said the pace of growth in the U.S. services sector, which accounts for some two-thirds of U.S. economic activity, was unchanged in April compared with March, while a separate report showed the U.S. private labor sector added 32,000 jobs in April.

(Editing by Padraic Cassidy)