(Updates to midmorning)
By Jennifer Coogan
NEW YORK, May 23 (Reuters) - U.S. stocks fell on Friday, as
crude oil prices resumed their climb, leaving investors on edge
about inflation before a long holiday weekend and hurting
energy-sensitive industries, such as restaurants and airlines.
The high oil prices pushed the American Stock Exchange
index of airline stocks down 4.7 percent.
Shares of restaurant chain Cheesecake Factory <CAKE.O> fell
5.9 percent to $19.65 and Darden Restaurants <DRI.N>, the
operator of the Red Lobster chain, fell 3.5 percent to $32.04.
U.S. crude futures rose 1.5 percent to $132.69 a barrel,
erasing some of Thursday's decline.
"The rising price of crude is a detriment to the consumer.
It's not that big in terms of absolute dollars, but the
psychological impact is hurting sentiment," said Bucky Hellwig,
senior vice president at Morgan Asset Management in Birmingham,
Alabama.
"In addition to that, the value of the consumers' homes
continues to fall, and that's getting people thinking we have
another downleg in the economy and all that is very negative
for stocks."
The Dow Jones industrial average <> was down 83.54
points, or 0.66 percent, at 12,542.08. The Standard & Poor's
500 Index <.SPX> was down 9.78 points, or 0.70 percent, at
1,384.57. The Nasdaq Composite Index <> was down 13.15
points, or 0.53 percent, at 2,451.43.
American International Group Inc <AIG.N>, the world's
largest insurer, was the top drag on the Dow and S&P 500 after
Moody's Investors Service cut the company's debt rating, citing
losses from its exposure to the U.S. mortgage market and credit
derivatives. For details, see [].
AIG shares were down 1.8 percent to $37.15 on the NYSE.
Kimberly-Clark <KMB.N>, the maker of Kleenex tissues and
Huggies diapers, said on Friday it would lift prices by 6
percent to 8 percent to offset higher raw material and energy
costs.
The market came off its opening lows after data showed the
pace of U.S. existing home sales fell slightly less than
expected.
Takeover talk also helped stem declines. Halliburton
<HAL.N>, the world's second biggest oil services company, has
bid $3.4 billion for British company Expro International
<EXR.L>, Expro said.
A report that Belgian brewer InBev <INTB.BR> is working on
a bid for U.S. rival Anheuser-Busch Companies Inc <BUD.N>
helped lift shares of the brewer of Budweiser beer 8.2 percent
higher to $56.85. The report appeared on the Financial Times
website in its Alphaville blog.
Trading volume may taper off in the afternoon because the
bond market was scheduled to close early at 2 p.m. before the
holiday weekend.
(Editing by Kenneth Barry)
