US STOCKS-Materials shrs lead Wall St down on euro debt woes

* Retailers hopeful over holiday shopping season

* Commodity-related shares lead declines, U.S. dollar up

* Lisbon denies report of pressure to seek bailout

* Indexes down: Dow 0.7 pct; S&P 0.5 pct; Nasdaq 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to midmorning, changes quotes)

By Rodrigo Campos

NEW YORK, Nov 26 (Reuters) - Commodity-related shares led U.S. stocks lower on Friday in a shortened post-holiday session, as investors shook off risky assets on worries that euro zone debt problems may continue to spread.

The U.S. dollar rallied while the euro slid to a new two-month low after a German newspaper reported that a majority of euro zone members and the European Central Bank were pressuring Lisbon to seek a bailout. Portugal and the European Commission denied the report. For details see [ID:nLDE6AP0F4] and [ID:nTOPNOW6]

The S&P materials sector <.GSPM> dropped nearly 1 percent as key base metals prices fell, pressured by the advancing greenback and after the Shanghai Futures Exchange raised margin requirements, prompting liquidation of speculative positions. [ID:nL3E6MQ0FH].

Freeport McMoRan Copper & Gold dropped almost 2 percent to $98.76.

"The debt crisis in Europe is attracting a lot of dollar buyers, causing risk aversion," said Peter Cardillo, chief market economist at Avalon Partners in New York.

The Dow Jones industrial average <.DJI> fell 72.96 points, or 0.65 percent, at 11,114.32. The Standard & Poor's 500 <.SPX> was down 5.80 points, or 0.48 percent, at 1,192.55. The Nasdaq Composite Index <.IXIC> lost 5.95 points, or 0.23 percent, at 2,537.17.

More than 80 percent of the S&P 500 components traded lower.

Investors were further rattled after China warned against military acts near its coastline ahead of U.S.-South Korean naval exercises that North Korea said risked pushing the region towards war. The North shelled a South Korean island earlier this week. [ID:nL3E6MQ058] and [ID:nKOREA]

Cardillo said the tense Korea situation is "very much alive" in investors' minds.

Consumer-related stocks were in focus as Black Friday, the time of year when retailers turn a profit. kicked off what could be the strongest holiday shopping season in three years. [ID:nNN2529414]

"From every indication we've gotten so far in consumer spending, I think the consumer will be out there, and it will be a good holiday season" for retailers, said Cardillo.

Still, retail shares were sluggish. Discount retailers Wal-Mart Stores Inc dipped 0.4 percent at $53.82 and Target Corp fell 0.7 percent to $56.86, while Macy's Inc , operator of its namesake retail chain and upscale Bloomingdale's, edged 0.3 percent lower to $25.95.

Del Monte Foods Co rose 4.2 percent to $18.75 a day after the company agreed to a buyout led by Kohlberg Kravis Roberts & Co . [ID:nN25103057]

Volume was very light at midmorning, with U.S. stock markets set to close at 1 p.m. EST (1800 GMT) following the U.S. Thanksgiving holiday on Thursday. (Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)