* Oil prices hit $100 a barrel on Libyan unrest
* HP trims 2011 revenue view, stock slides
* Dow off 0.9 pct, S&P off 0.6 pct, Nasdaq off 1.2 pct
* For up-to-the-minute market news see []
(Updates to close, changes byline)
By Chuck Mikolajczak
NEW YORK, Feb 23 (Reuters) - U.S. stocks dropped for a
second straight session on Wednesday as Libya's violence sent
oil prices up briefly to $100 a barrel and tech shares sank,
adding credence to calls for a market correction.
Oil futures jumped to their highest since October 2008 amid
worries about supply disruptions in Libya, a top oil producer.
Late in the day, oil eased off the day's highs, helping stocks
trim losses.
The day's drop follows a 2.1 percent decline in the S&P 500
on Wednesday, and the second straight session of above-average
trading volume. However, since a modest correction is expected,
investors at this point are taking the declines in stride.
"We've had a solid run-up here in the equity markets for an
extended period, really without a correction, so long-term,
this will be a good thing for the market to have a little bit
of a pullback," said Wayne Schmidt, chief investment officer at
Gradient Investments In St. Paul, Minnesota.
The Nasdaq led losses as recent top gainers also lost
ground, including Netflix <NFLX.O>, down 4.7 percent at
$211.20, and Salesforce.com <CRM.N>, down 2.5 percent at
$133.37.
Hewlett-Packard <HPQ.N> late Tuesday cut its 2011 revenue
forecast on slipping demand for its personal computers, and at
least six brokerages cut their price targets on the stocks.
Shares sank 9.6 percent to $43.59. For details, see
[]
The S&P 500 has climbed nearly 25 percent since the start
of September and many analysts have said a short-term
correction is likely. However, the benchmark index recovered
from hitting an intraday low of 1,299.55 during the session.
Analysts eyed support at 1,296, the mid-January highs on the
S&P 500, and also 1,286, the 50-day moving average.
"You saw a lot of shorts this morning, going into this
market with anticipation of problems spreading in the Middle
East, and now that people have made some money, you might see
some short covering in the afternoon," said Doreen Mogavero,
CEO of Mogavero, Lee & Co. in New York.
Some saw the drop as a positive as it gives investors the
chance to buy stocks on the dip, noting that the longer-term
outlook remains bullish for stocks even if equity markets slip
further.
"Whether this is it or whether we pull back another 3 or 4
percent, it's healthy and probably warranted, given the run
that we've had, and also given the uncertainty in the world --
particularly in the Middle East," Schmidt added.
The Dow Jones industrial average <> fell 107.01 points,
or 0.88 percent, at 12,105.78. The Standard & Poor's 500 Index
<.SPX> lost 8.04 points, or 0.61 percent, to 1,307.40. The
Nasdaq Composite Index <> declined 33.43 points, or 1.21
percent, to 2,722.99.
While higher oil prices often boost energy-sector shares,
they usually drag on the overall stock market. Higher energy
costs tend to reverberate through the economy, pushing up the
costs of utilities, manufactured goods and transportation.
The S&P energy index <.GSPE> gained 2 percent, while the
Dow Jones Transportation Average <.DJT> shed 2.1 percent.
Thousands of Libyans celebrated the liberation of the
eastern city of Benghazi from the rule of Muammar Gaddafi, who
was reported to have sent a plane to bomb them on Wednesday as
he clung to power. [] and []
Volume was active with about 10.25 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, above the daily average of 7.99 billion.
Declining stocks outnumbered advancing ones on the NYSE by
1,959 to 1,062, while on the Nasdaq, decliners beat advancers
by 1,996 to 629.
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
