US stocks slid on Monday as surging oil and gold prices stoked investor fears about inflation risks and overshadowed optimism about corporate profits.
Crude oil hit $70 a barrel for the first time since Hurricane Katrina as worries increased about oil producer Iran's nuclear stand-off with the West, and front-month contract prices settled above that level for the first time since the New York Mercantile Exchange launched crude oil futures trading in 1983.
Airlines ranked among the sectors that took a beating from higher oil prices.
Gold prices in New York hit a 25-year high, closing above $618 an ounce.
Gains in commodity prices deflected some attention away from earnings just as the quarterly reporting period gets under way. Shares of Citigroup Inc, the world's largest financial services company by market value, rose after the company reported first-quarter profit that beat analysts' expectations.
"People are really fearful of $3 gas going into the summer. That's a big nervous point for your average consumer and I certainly think these prices will be factored into the next earnings cycle," said John O'Brien, head of sales trading at KeyBanc Capital.
The Dow Jones industrial average was down 63.87 points, or 0.57 percent, at 11,073.78. The Standard & Poor's 500 Index was down 3.79 points, or 0.29 percent, at 1,285.33. The Nasdaq Composite Index was down 14.95 points, or 0.64 percent, at 2,311.16.
At one point, the Nasdaq declined 1 percent and briefly dipped below the key pscyhological level of 2,300 for the first time in almost three weeks.
High oil prices tend to be a drag on the economy, slowing consumer spending and raising costs for businesses, while increasing the risk of inflation. The Federal Reserve also has indicated it's intent on reining in inflation by raising interest rates. Last month, it raised rates for the 15th time since June 2004.
Shares of JetBlue Airways Corp dropped 9 percent, or 93 cents, to $9.47 on the Nasdaq, while Continental Airlines stock fell 10.8 percent, or $2.95, to $24.42 on the New York Stock Exchange, leading a decline in airline stocks on concern about oil prices.
Gold, which investors tend to use as a hedge against inflation, also soared. Benchmark gold for June delivery in New York rose $18.70 to settle at $618.80 per ounce, a shade below the 25-year peak at $619.30.
Shares of Newmont Mining Corp climbed 6 percent, or $3.20, to $56.07 on the NYSE.
Industrial conglomerates such as diversified manufacturers General Electric Co and 3M Co helped pull the S&P 500 lower, with GE exerting the heaviest pull on the index. GE shares fell 1.8 percent, or 60 cents, to $33.29, while shares of 3M shed 0.9 percent, or 71 cents, to $80.26, both on the NYSE.
Stocks had held flat much of the morning until US May crude oil futures jumped above $70.
US crude oil for May delivery settled at $70.40 a barrel, up $1.08 - a gain of 1.6 percent, from Thursday's NYMEX closing price before the Easter break.
Oil's all-time high of $70.85 was reached on August 30 after Hurricane Katrina temporarily crippled the oil-producing Gulf Coast.
The spike in oil prices was driven by investors' growing worries about the West's dispute with Iran over its nuclear goals. Iran will continue to enrich uranium, influential former Iranian President Akbar Hashemi Rafsanjani said on Monday, as tensions grow over possible US military action against Tehran's nuclear program.
Only five of the 30 Dow components traded higher. Among them, Citigroup's stock was up about 0.6 percent, or 30 cents, at $48.35 on the NYSE. And shares of Exxon Mobil Corp, the world's largest publicly traded oil company, gained 0.8 percent, or 49 cents, to $62.05.
Apple Computer Inc fell 2.5 percent, or $1.66, to $64.81 and had the biggest negative effect on the Nasdaq 100, before its earnings release later this week.
Among other companies reporting quarterly results this week are tech bellwethers Intel Corp and International Business Machines Corp, as well as big Internet names such as Google Inc, Yahoo Inc and eBay Inc.
Volume was light on the NYSE, with about 1.27 billion shares changing hands, below last year's daily average of 1.61 billion. On Nasdaq, about 1.85 billion shares traded, slightly above last year's daily average of 1.80 billion.
Decliners outnumbered advancers by a ratio of 5 to 4 on the NYSE, while on Nasdaq, about seven stocks fell for every five that rose.