Stocks slump as oil surges
Wall Street steps back as investors react to record oil and gas prices and weaker forecasts from Texas Instruments and DuPont.
NEW YORK (CNNMoney.com) -- Stocks tumbled Tuesday as investors mulled crude oil prices near a record $120 a barrel and dour profit outlooks from DuPont and Texas Instruments.
The Dow Jones industrial average (INDU) lost around 105 points, or approximately 0.8%. The broader Standard & Poor's 500 (SPX) index fell 0.9%. The Nasdaq composite (COMP) lost 1.3%. The Russell 2000 small-cap index fell 2%.
Stocks were mixed Monday as investors mulled Bank of America's (BAC, Fortune 500) weaker-than-expected quarterly results and record oil and gas prices. But the tone was more negative Tuesday, as commodity prices hit new records and investors resumed their concerns about the earnings picture.
"Oil knocking at $120 a barrel and gas at $3.50 a gallon is clearly going to cut into consumer spending," said John Wilson, chief technical strategist at Morgan Keegan.
He said the surging commodity prices were continuing to ramp up worries about how a consumer spending recession could impact retailers and the economy. Additionally, investors remain wary about the outlook for corporate earnings, especially in the financial sector.
With 30% of the S&P 500 having reported results, earnings are currently on track to have fallen 15.4% from a year earlier, according to Thomson Financial estimates.
After the close of trade, Yahoo (YHOO, Fortune 500) reported sales and earnings that beat estimates. Yet it isn't clear whether that will be enough to get Microsoft to raise its takeover bid. Shares were little changed in extended-hours trading.
Boeing (BA, Fortune 500), Delta Air Lines (DAL, Fortune 500), Schering-Plough (SGP, Fortune 500) and UPS (UPS, Fortune 500) are among the companies due to report results before the start of trading on Wednesday. Wednesday also brings the weekly oil inventories report.
Earnings. Late Monday, Texas Instruments (TI) reported higher quarterly earnings that met estimates. But the chipmaker also forecast current-quarter profit that was short of most estimates, citing weaker demand. On Tuesday, several analysts downgraded the stock. Shares fell almost 6%.
Dow component AT&T (T, Fortune 500) reported higher quarterly sales and earnings that were in line with expectations, thanks to growth in its wireless division. Shares inched higher.
DuPont (DD, Fortune 500), also a Dow component, reported higher quarterly sales and earnings that topped estimates, due to higher prices and the benefit of the weak dollar. The chemical maker reiterated its 2008 earnings forecast, but also said that the weaker U.S. economy will offset any gains from global markets. Shares fell 4%.
McDonald's (MCD, Fortune 500) reported higher quarterly sales and earnings that beat forecasts, due to strong global sales and the weak dollar. Shares of the Dow component ended slightly lower.
UnitedHealth Group (UNH, Fortune 500) reported higher quarterly earnings that missed forecasts on higher quarterly revenue that topped estimates. However, UnitedHealth cut its 2008 forecast by 40 cents per share, citing higher flu costs and projected membership declines, among other factors. Shares fell almost 10%.
UAL (UAUA, Fortune 500), the parent of United Airlines, led the list of carriers reporting big quarterly losses due to surging fuel costs. Shares were off almost 37%.
Meanwhile, Apple (AAPL, Fortune 500) shares fell ahead of its quarterly earnings report due Wednesday, as analysts tried to get a handle on what to expect. (Full story)
Among other stock movers, CIT Group (CIT, Fortune 500) slumped almost 16% in active New York Stock Exchange trade after the financial services firm said it would raise $1.5 billion from a stock offering. The company has been hit hard by the mortgage and credit market collapse.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by 7 to 3 on volume of 1.33 billion shares. On the Nasdaq, decliners topped advancers by more than 3 to 1 on volume of 1.95 billion shares.
Housing. March existing-home sales fell 2% to a 4.93 million annualized rate from the previous reading of 5.03 million. Economists surveyed by Briefing.com thought sales would fall to a 4.92 million annualized rate.
Commodity prices spike. U.S. light crude oil for May delivery rose $1.89 to settle at a record $119.37 a barrel on the New York Mercantile Exchange. Oil hit an all-time trading high of $119.90 a barrel earlier.
The national average price for a gallon of regular unleaded gas hit an all-time record of $3.51, AAA reported.
COMEX gold for June delivery rose $7.60 to settle at $925.20 an ounce.
Other markets. The dollar slipped to a new record low against the euro and also fell against the yen.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.69% from 3.72% late Monday. Bond prices and yields move in opposite directions. 
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