US stocks tumbled on Tuesday after oil prices surged to a new record above $44 per barrel and a report showed consumer spending in June took its biggest plunge in almost 3 years.
NYMEX crude oil futures, which have been climbing all summer, hit a new record on worries about scarce supplies. The spurt in crude prices sent shares of oil companies ChevronTexaco, ConocoPhillips Co and Exxon Mobil to 52-week highs.
Another weight on the market was weak quarterly results from phone company Qwest Communications International Inc and hospital operator Tenet Healthcare Corp, which both posted wider losses.
Also hurting the market was a government report that showed US consumer spending in June notched the biggest drop since September 2001 as shoppers, sapped by high energy costs, cut back sharply on car purchases.
The Dow Jones industrial average fell 58.92 points, or 0.58 percent, to 10,120.24, according to the latest data. The Standard & Poor's 500 Index lost 6.93 points, or 0.63 percent, to 1,099.69. The technology-laced Nasdaq Composite Index dropped 32.67 points, or 1.73 percent, to 1,859.42.
Trading was moderate, with 1.34 billion shares changing hands on the New York Stock Exchange, below the 1.4 billion daily average for last year. About 1.49 billion shares were traded on Nasdaq, below the 1.69 billion daily average last year.
Decliners outnumbered advancers on the NYSE by 6-to-5, and about 2-to-1 on Nasdaq.
The spike in oil prices came amid US government warnings of possible al Qaeda attacks on key financial institutions as well as comments by Opec's president, Purnomo Yusgiantoro, who said the cartel had no additional supplies that were immediately available.
US crude oil futures hit a new 21-year high of $44.24 in overnight trade before easing slightly during the regular session. On the New York Mercantile Exchange, crude oil for September delivery settled on Tuesday at $44.15 a barrel, up 33 cents.
In company news, shares of phone company Qwest Communications International Inc fell 80 cents, or 20.1 percent, to $3.17 after it reported a larger-than-expected quarterly loss after charges for job cuts and boosting reserves for legal settlements.
On the upside, Tyco International Ltd gained after it posted a 63 percent increase in quarterly profit on strength in its electronics and engineering businesses, and said it is exploring ways to return cash to shareholders. It gained 17 cents to $31.41.
ConocoPhillips' stock rose 12 cents to $79.03, slipping from an earlier high of $79.93. Shares of ChevronTexaco jumped $2.18, or 2.3 percent, to $98.66, after earlier hitting a 52-week high at $98.80. Exxon Mobil gained 64 cents, or 1.4 percent, to $46.89, just below its fresh 52-week high of $46.94 hit earlier during the session.
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