(Updates to afternoon trading)
* Optimism for Greek deal fades, analyst says
* Apple rises; Netflix trims gains after Icahn comments
* Indexes down: Dow 0.9 pct, S&P 0.7 pct, Nasdaq 0.7 pct
By Ryan Vlastelica
NEW YORK, June 24 (Reuters) - U.S. stocks fell in a broad decline on Wednesday as the outcome of negotiations between Greece and its international creditors remained up in the air, prompting investors to drop riskier assets like equities.
Wall Street has lately taken its cue from the situation in Greece, which needs fresh funds to avoid defaulting on a $1.8 billion debt repayment to the IMF on June 30.
Greek Prime Minister Alexis Tsipras recently announced tax and reforms proposals, which market participants took as a sign of progress. Creditors demanded sweeping changes to the proposals on Wednesday, adding fresh uncertainty to talks aimed at unlocking aid to avert a debt default next week.
"The optimism we had about getting close to a deal has faded. That doesn't mean we won't get one, but insiders seem less confident than they were a few days ago," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"If Greece defaults, the economic impact on the U.S. will be relatively minor, but the headline risk will be significant and could lead to a drop of 5 or even 10 percent."
The U.S. Commerce Department said gross domestic product fell at a 0.2 percent annual rate in the January-March quarter, instead of the 0.7 percent it estimated last month.
Investors have been keeping a keen eye on economic data to see if the U.S. economy has recovered from a slow start at the beginning of the year. The Federal Reserve has said it remains data-dependent and expects to raise rates when it sees a sustained rebound in the economy.
The Dow Jones industrial average fell 158.72 points, or 0.87 percent, to 17,985.35, the S&P 500 lost 13.98 points, or 0.66 percent, to 2,110.22 and the Nasdaq Composite dropped 36.37 points, or 0.7 percent, to 5,123.73.
All of the 10 major S&P 500 sectors were lower, with the materials index leading the declines with a 0.92 percent drop.
Monsanto fell 5.3 percent to $106.81 as the S&P's biggest percentage decliner after the world's largest seed company said it would still pursue an acquisition of Swiss rival Syngenta even as it warned of market challenges ahead.
Apple rose 1 percent to $128.32. Carl Icahn said that he sees the company representing the same opportunity that Netflix offered several years ago.
Netflix was flat at $690.99 after Icahn said his firm had sold the remainder of its stake in the company. Trading was heavy a day after the video-streaming company's board approved a seven-for-one stock split.
Lennar rose 4.4 percent to $51.15. The second-largest U.S. homebuilder reported a better-than-expected 33 percent jump in quarterly profit as it sold more homes at higher prices.
Declining issues outnumbered advancing ones on the NYSE by 2,139 to 857, for a 2.50-to-1 ratio; on the Nasdaq, 1,969 issues fell and 764 advanced for a 2.58-to-1 ratio favoring decliners.
The S&P 500 was posting 17 new 52-week highs and 2 new lows; the Nasdaq was recording 104 new highs and 25 new lows. (Editing by Don Sebastian and Nick Zieminski)