US stocks fell on Wednesday as crude prices hit a record high above $61 a barrel, fuelled by fears that two tropical storms would pinch supplies. The surge in oil prices capped a three-day run that drove NYMEX August crude futures to settle at $61.28 a barrel - up more than 8 percent since last Thursday.
Rising crude prices punished the shares of benchmark Dow industrial companies such as Caterpillar Inc and United Technologies Corp Higher energy prices usually hurt the stock market because they ripple through the economy, driving up the cost of everything from trucking services to industrial chemicals, and taking a bite out of consumers' discretionary spending.
The Dow Jones industrial average dropped 101.12 points, or 0.97 percent, to end at 10,270.68. The Standard & Poor's 500 Index fell 10.05 points, or 0.83 percent, to finish at 1,194.94. The technology-laced Nasdaq Composite Index lost 10.10 points, or 0.49 percent, to 2,068.65.
"The big driving force today is the price of oil," said Michael Bee, a lead equity strategist at Boyd Watterson Asset Management LLC, a Cleveland, Ohio-based company with $3.7 billion under management. "The market is trading on a daily basis on a reaction to oil, and the bad weather down in the Southeast has certainly had an impact." Fears that storms in the Gulf of Mexico and Caribbean would affect oil rigs in the areas inflamed worries over oil supplies, as did storm-related interruptions at five Louisiana refineries.
Crude for August delivery hit an all-time high of $61.35 a barrel - the highest price since oil futures began trading on the NYMEX in 1983. Shares of heavy equipment maker Caterpillar slipped 0.9 percent, or 87 cents, to $95.30, while industrial and aerospace conglomerate United Technologies fell 2.1 percent, or $1.09, at $50.55. Both trade on the New York Stock Exchange.
Exxon was among the biggest drags on both the Dow and the broader S&P 500, falling 1.7 percent, or $1.03, to $59.11 on the NYSE. Chevron dropped 2.4 percent, or $1.40, to $57.16 on the Big Board.
Shares of five casual-dining chains declined after brokerage Raymond James cut its rating on the sector, noting that the stocks were at historic highs.
Darden Restaurants Inc shares slipped 3.2 percent, or $1.23, to $31.76, while IHOP Corp fell 4.6 percent, or $2, to $41.40, and Ruby Tuesday Inc dropped 3.7 percent, or $1, to $25.80, all on the NYSE. California Pizza Kitchen Inc was off 1.4 percent, or 37 cents, at $26.54, and Rare Hospitality International Inc dropped 4.6 percent, or $1.40, to $29.35, both on Nasdaq.
After the closing bell, some retail and restaurant chains' shares fell after issuing lower forecasts or earnings. Aeropostale Inc, a teen-oriented apparel retailer, lost 8 percent to $31.01, after the company cut its second-quarter forecast as discounts to clear summer merchandise crimped June profit margins. Restaurant chain Ruby Tuesday Inc slipped 4.5 percent to $24.63 after it reported lower quarterly earnings, due partly to higher advertising costs.
Trading was active, with 1.46 billion shares changing hands on the New York Stock Exchange, matching the daily average for last year. About 1.60 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.
The number of stocks declining in value exceeded the number that gained by a ratio of about 9 to 7 on the NYSE and about 3 to 2 on Nasdaq.
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