(Updates to close)
By Caroline Valetkevitch
NEW YORK, April 22 (Reuters) - U.S. stocks sank on Tuesday
as oil prices neared $120 a barrel and fed worries about
inflation and consumer spending, while a series of
disappointing profit outlooks made the mood even worse.
Airline stocks <.XAL> were particularly hard hit, plunging
12.4 percent to a record low, as soaring oil has pushed jet
fuel costs to record levels and retailers' shares <.RLX>
dropped 2.2 percent on fears that Americans will curtail
shopping to pay for higher gasoline prices.
Texas Instruments Inc <TXN.N> added to worries about the
economic outlook by warning of tepid demand for cell phones.
Its stock fell 5.8 percent to $28.82.
Inconsistent earnings during the quarterly reporting
period have kept concerns about the economy close to the
surface. While big multinationals with significant overseas
sales have fared well, companies with a more domestic focus
have sputtered.
Oil "has done nothing but go straight up, and obviously,
it has put a damper on any type of economic recovery, but
after a certain point in time, the consumer is just going to
have to stop spending," said Angel Mata, managing director of
listed equity trading at Stifel Nicolaus Capital Markets, in
Baltimore.
The Dow Jones industrial average <> fell 104.79
points, or 0.82 percent, to 12,720.23. The Standard & Poor's
500 Index <.SPX> slid 12.23 points, or 0.88 percent, to
1,375.94. The Nasdaq Composite Index <> dropped 31.10
points, or 1.29 percent, to 2,376.94.
Oil jumped to a record $119.90 a barrel intraday, fueled
by weakness in the dollar, which encouraged buying of
commodities, and developments in Nigeria and the U.K. that
heightened supply concerns.
"Anything having to do with transportation, the movement
of goods and services, the entertainment business," is
affected, Mata said. "You cannot have oil at the price it's at
without having a disastrous effect on these businesses."
Shares of UAL Corp <UAUA.O>, parent of United Airlines,
plummeted 36.8 percent, or $7.88, to $13.55 on the Nasdaq
after the company reported a quarterly loss that was more than
triple a year ago on soaring fuel costs .
AirTran Holdings <AAI.N>, parent of AirTran Airways, also
reported a loss as did JetBlue Airways <JBLU.O>. Shares of
AirTran tumbled 20.8 percent, or 95 cents, to $3.61 on the New
York Stock Exchange, while JetBlue's shares lost 5.7 percent,
or 28 cents, to $4.65 on the Nasdaq.
Shares of Apple Inc <AAPL.O> fell 4.7 percent to $160.20
on the Nasdaq. Apple ranked as the top drag on both the S&P
500 and the Nasdaq 100 <> after American Technology
Research downgraded the iPod maker's stock to "neutral" from
"buy," saying it is no longer inexpensive and the company's
near-term results might not meet expectations.
DuPont Co <DD.N>, down 4 percent at $50.16 on the NYSE,
led the major decliners in the Dow industrials. The chemicals
maker said first-quarter profit rose, but gave a cautious
outlook. For details, see []
Other companies disappointing investors included
UnitedHealth Group Inc <UNH.N>. It posted a
lower-than-expected first-quarter profit, hurt by weakness in
its business serving employers and slashed its full-year
earnings forecast. Its shares fell 9.7 percent to $34.15.
In economic news, the National Association of Realtors
said the pace of existing home sales in the United States fell
2 percent in March, in a report that showed the U.S. housing
market continues to struggle.
Trading was moderate on the NYSE, with about 1.33 billion
shares changing hands, well below last year's estimated daily
average of roughly 1.90 billion, while on Nasdaq, about 1.94
billion shares traded, below last year's daily average of 2.17
billion.
Declining stocks outnumbered advancing ones on the NYSE by
11 to 4 and on the Nasdaq by 3 to 1.
(Editing by Jan Paschal)
