US STOCKS-Sears tumbles on report vendor insurers to trim coverage

By Rodrigo Campos

NEW YORK, Oct 8 (Reuters) - Sears Holding shares slumped on Wednesday following a report that three of the biggest insurance firms for its suppliers were seeking to reduce coverage.

The report by Bloomberg News also said the move prompted at least one vendor to halt shipments to Sears.

Sears stock was down 12 percent to $26.67 after falling as much as 17.3 percent, which would be the largest daily percentage decline since November 2012. The slide dragged the stock near the $24.10 low hit two weeks ago, which was the lowest since January 2012.

In the past weeks, the retailer has twice turned to its billionaire CEO Eddie Lampert's hedge fund for a cash infusion and insurers and banks had raised the cost of guaranteeing payment to vendors.

The broader U.S. stock market was little changed in volatile trading, with concerns over the strength of the global economy weighing on sentiment a day after the S&P 500 closed at its lowest in nearly two months.

Index snapshot at 1241 EDT:

* S&P 500 was up 0.03 points, or 0 percent.

* Nasdaq Comp was down 0.28 points, or 0.01 percent.

* Dow industrials was up 21.45 points, or 0.13 percent.

* Russell 2000 was down 5.2 points, or 0.48 percent.

* S&P MidCap was down 4.76 points, or 0.36 percent.

* S&P SmallCap was down 2.12 points, or 0.34 percent.

(Editing by Bernadette Baum)