Dow dips, day 3

NEW YORK (CNNMoney.com) -- Stocks slumped Friday afternoon, with the blue-chip average falling for a third session as investors eyed higher oil and gold prices and comments from a Federal Reserve official.

The Dow Jones industrial average (down 39.66 to 12,646.36, Charts) lost 0.3 percent with around 2 hours left in the session. The broader S&P 500 (down 5.49 to 1,450.89, Charts) index lost around 0.4 percent. The Nasdaq (down 9.05 to 2,515.89, Charts) composite lost 0.3 percent after ending the previous session at a six-year high for the third day in a row.

Blue chips slumped Thursday in response to higher oil prices and the latest news of geopolitical unrest in the Middle East. Those concerns continued to weigh Friday, said Peter Cardillo, chief market economist at Avalon Partners.

"In the absence of any economic news, and with oil and gold prices continuing to move higher on geopolitical concerns, investors are becoming a little skittish," Cardillo said.

U.S. light crude oil for April delivery rose 25 cents to $61.30 a barrel on the New York Mercantile Exchange, giving back bigger gains.

Prices have risen over the last two sessions in response to a slide in weekly crude inventories and Iran's stance on nuclear weapons, announced Wednesday.

COMEX gold for April delivery added $4.60 to $687.60 an ounce.

Bond prices rose, sending the corresponding yields lower.

Investors also eyed afternoon comments from Dallas Federal Reserve Bank President Richard Fisher, who reiterated the Fed's recent inflation message, namely that pricing pressures are moderating, but remain a threat.

San Francisco Fed President Janet Yellen is expected to speak after the close.

The rise in oil prices boosted oil services stocks, but weighed on companies that depend directly on fuel, such as airlines and other transportation.

The Amex Airline (Charts) index fell 1.7 percent, with Continental Airlines (down $1.46 to $42.78, Charts) and AMR (down $0.92 to $37.10, Charts) among the decliners.

The Dow Jones Transportation (down 28.97 to 5,134.32, Charts) average lost 0.6 percent, after hitting a record high earlier in the week.

Lowe's (up $1.47 to $35.10, Charts) reported lower fourth-quarter earnings that nonetheless topped estimates, and also issued a first quarter and full-year forecast that is in line with analysts' estimates. Shares of the home improvement retailer gained 3.5 percent.

Microsoft (down $0.48 to $28.91, Charts) shares continued to weaken after a U.S. federal jury ruled Thursday that the software leader infringed on audio patents held by Alcatel-Lucent (up $0.18 to $13.32, Charts) and should pay $1.52 billion in damages. Microsoft shares fell 1 percent, while Alcatel-Lucent shares gained 1 percent.

BEA Systems (down $1.47 to $11.73, Charts) slumped 10 percent in unusually active Nasdaq trading after issuing a fiscal first-quarter revenue forecast that is below current forecasts. The outlook overshadowed the business software maker's higher fourth-quarter revenue.

Circuit City (down $0.51 to $20.27, Charts) lost nearly 5 percent after saying its chief financial officer is leaving to join PetCo Animal Supplies.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 930 million shares. On the Nasdaq, decliners topped advancers 4 to 3 on volume of 1.35 billion shares.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.67 percent from 4.73 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and slipped versus the yen.

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