* Global central banks scale back liquidity programs
* Aug existing homes sales fall unexpectedly
* Dow down 0.4 pct, S&P down 0.8 pct, Nasdaq down 1.1 pct
* For up-to-the-minute market news, click STXNEWS/US (Updates to midday, changes byline)
By Ryan Vlastelica
NEW YORK, Sept 24 (Reuters) - U.S. stocks dropped on Thursday after world central banks said they would scale back infusions of U.S. dollars into their banking systems and U.S. data showed weakness in the housing sector.
Stocks fell on news the Federal Reserve, along with other central banks, would reduce programs to provide institutions with short-term liquidity, a sign the removal of extraordinary monetary stimulus was under way.
Sales of existing homes unexpectedly fell in August after several months of strong reports, which investors viewed as evidence housing had finally bottomed out.
The Dow Jones industrial average was down 40.13 points, or 0.41 percent, at 9,707.06. The Standard & Poor's 500 Index shed 8.77 points, or 0.83 percent, at 1,052.10. The Nasdaq Composite Index sank 22.50 points, or 1.05 percent, at 2,108.92.
The central bank news came a day after a Fed policy statement indicated it would start to reduce support for financial markets, sparking a selloff in stocks.
"You can't continue to bail out this economy without negative ramifications," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"All the money printing crack addicts who are waiting for more of it are not getting their money printed and they are going to throw a hissy fit."
After the home sales report, the Dow Jones U.S. Home Construction index fell 1.5 percent. D.R. Horton sank 2.6 percent to $12.13 while Beazer Homes shed 4.7 percent to $5.74.
"With a market that has had such an explosive recovery from its lows, any kind of news that has people second-guessing the recovery will give people an excuse to sell," said Craig Peckham, equity trading strategist at Jefferies & Co in New York.
Stocks initially bounced at the open after government data showed an unexpected fall in the number of workers filing new claims for jobless benefits.
Electronic Arts shares fell 3.4 percent to $19.16 after a Microsoft executive said the software company had no plans to buy EA, shooting down talk of a possible bid. (Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)