* NYSE-listed issues still trading on other exchanges
* NYSE says technical issue not due to cyber attack
* Stock were already lower on China fears
* United Airlines falls after computer glitch halts flights
* Indexes down: Dow 1.01 pct, S&P 1.15 pct, Nasdaq 1.28 pct (Changes comment, updates prices)
By Tanya Agrawal
July 8 (Reuters) - U.S. stocks stayed below 1 percent in afternoon trading on Wednesday, while the trading suspension in all securities on the New York Stock Exchange entered its third hour.
The halt started just after 11:30 a.m. ET due to technical difficulties, although NYSE-listed issues continued to trade on other exchanges, such as those run by Nasdaq OMX Group and BATS Global Markets.
The NYSE said the halt was not due to a cyber breach. The exchange said chose to suspend trading to avoid problems arising from the technical issue, but did not say when trading was expected to resume. NYSE said it would cancel all open orders.
"It was a mess from the open," said a broker who did not want to be named. Some of the internet ports to the NYSE would not connect, or would unexpectedly disconnect, and this was happening from before market opened until the halt, the broker said.
The exchange does a lot of its business at the close of trading, and if it's still down then, the problems could increase.
"That could be a major problem," said Peter Costa, president of boutique trading firm Empire Executions Inc. "The bigger issue is that there are unfilled orders that would likely not get filled at the closing price."
The NYSE halt came shortly after United Airlines was forced to ground flights at all U.S. airports due to computer issues. United Airlines' shares were down 2.2 percent at $53.11.
The U.S. Department of Homeland Security said there were "no signs of malicious activity at this time" relating to the technical glitches at the NYSE and United Airlines, CNN said.
U.S. Securities and Exchange Commision Chair Mary Jo White said the agency was "in contact with NYSE", and was closely monitoring the situation.
The New York Stock Exchange accounted for about 13.4 percent of all equities volume last month and 12.5 percent on Tuesday, according to BATS Global Markets data.
At 13:41 p.m. ET the Dow Jones industrial average was down 179.48 points, or 1.01 percent, at 17,597.43, the S&P 500 was down 24.02 points, or 1.15 percent, at 2,057.32 and the Nasdaq Composite was down 63.99 points, or 1.28 percent, at 4,933.47.
U.S. stocks were in the red even before the halt as the slide in Chinese markets spurred concerns over its impact on global economic growth. All 10 major S&P 500 sectors were lower, with the telecommunications index down 2 percent.
Chinese shares have fallen more than 30 percent in the last three weeks, and some investors fear China's turmoil is now a bigger risk than the crisis in Greece.
Fears of a slowdown in China will be a concern for U.S. companies, especially materials and industrial companies, which derive a chunk of their profit from the region.
Alcoa reports results after the close of markets, kicking off the quarterly earnings season. U.S. corporate profits are expected to have fallen 3.1 percent in the second quarter, according to Thomson Reuters estimates data.
Tesla Motors fell 3.7 percent to $257.98 after Pacific Crest downgraded the stock to "sector weight" from "overweight" on valuation, the second rating cut in two days.
Investors looking for clues on the timing of a U.S. interest rate hike will study the minutes from the U.S. Federal Reserve's June 16-17 meeting, due at 2 p.m. ET.
Declining issues outnumbered advancers on the NYSE by 2,391 to 523. On the Nasdaq, 2,176 issues fell and 568 advanced.
The S&P 500 index showed two new 52-week highs and 11 new lows, while the Nasdaq recorded 23 new highs and 109 new lows. (Additional reporting by Jonathan Spicer and Sinead Carew in New York; Editing by Savio D'Souza)