NEW YORK - US stocks fell on Wednesday for a third day as the approach of Hurricane Rita helped lift oil prices, renewing concerns about the impact of higher energy costs on corporate profits.
The Dow Jones industrial average and the Nasdaq Composite Index closed at their lowest level in
more than two months. The Standard & Poor's 500 is now down for the year.
Avon Products Inc. shares plunged almost 12 per cent to US$27 on the New York Stock Exchange after it became the latest cosmetics company to cut its profit outlook, due in part to Hurricane Katrina and higher fuel costs.
Worries about rising oil prices especially hurt the shares of conglomerate General Electric Co., a Dow component, and the stocks of other companies sensitive to swings in energy costs.
Property and casualty insurance companies, including Allstate Corp., also slid on concerns about Rita's potential for devastation after it was upgraded to a Category 4 storm and threatened oil facilities as it approached Texas.
"Stocks suffered today as concerns about inflation, higher oil prices, earnings and a new hurricane mounted," said Subodh Kumar, chief investment strategist at CIBC World Markets in Toronto.
"The outlook is a bit uncertain, and uncertainty is never good for stocks." The Dow was down 103.49 points, or 0.99 per cent, to end at 10,378.03. The S&P 500 was down 11.14 points, or 0.91 per cent, to finish at 1,210.20, down 0.14 per cent for the year. And the technology-laced Nasdaq was down 24.69 points, or 1.16 per cent, to close at 2,106.64.
US crude oil futures for November delivery rose 60 cents to settle at US$66.80 a barrel. Rita was raised to a Category 5 storm late Wednesday afternoon, exceeding the strength that Hurricane Katrina had when it slammed into the US Gulf Coast last month, hurting oil production.
Higher oil prices added to nervousness in the market following the Federal Reserve's decision on Tuesday to raise interest rates again.
US weekly oil inventory data from the Energy Information Administration showed an unexpected decline of 300,000 barrels in crude stockpiles. Analysts had expected a modest increase.
Slid
GE shares slid 0.9 per cent, or 29 cents, to US$33.55 on the NYSE.
McDonald's Corp. stock fell almost 4 per cent and ranked as the Dow's biggest percentage decliner after it said it's planning an initial public offering of its popular Chipotle restaurant chain. But McDonald's, the world's largest restaurant company, said it won't pursue a new corporate structure for its real estate assets trust. McDonald's shares declined 3.7 per cent, or US$1.20, to US$31.42.
Shares of Wal-Mart Stores Inc., the world's largest retailer and another Dow component, fell 1.7 per cent, or 72 cents, to US$42.49. Declines in Wal-Mart helped push an S&P index of retailers down nearly 1.3 per cent.
Allstate shares fell 2.4 per cent, or US$1.28, to US$51.83.
Tyco International shares fell 2 per cent, or 57 cents, to US$28.28 after it said on Wednesday it will acquire a majority voting interest in Floreane Medical Implants, in a US$145 million deal.
In other company news, Morgan Stanley, the biggest securities firm by market value, fell 1.2 per cent, or 65 cents, to US$51.75. The Wall Street firm on Wednesday posted higher quarterly earnings before a US$1 billion charge from the planned sale of its aircraft-leasing unit.
Home builder Lennar Corp. said third-quarter earnings would top Wall Street estimates, with new home orders holding up. Yet its shares fell 1.1 per cent, or 61 cents, to close at US$53.49 on the NYSE, after earlier hitting a session high of US$56.44.
Package carrier FedEx Corp. reported its fiscal first-quarter profit rose. Its shares jumped 8 per cent, or US$6.15, to US$83.15 on the NYSE.
Trading was heavy on the New York Stock Exchange, with about 1.93 billion shares changing hands, above last year's daily average of 1.46 billion. On Nasdaq, about 1.80 billion shares were traded, below last year's daily average of 1.81 billion.
Declining shares outnumbered advancing stocks by a ratio of about 2 to 1 on the NYSE and by a bit more than 3 to 1 on Nasdaq.
- REUTERS
<EM>US stocks</EM>: Markets fall on hurricane fears
NEW YORK - US stocks fell on Wednesday for a third day as the approach of Hurricane Rita helped lift oil prices, renewing concerns about the impact of higher energy costs on corporate profits.
The Dow Jones industrial average and the Nasdaq Composite Index closed at their lowest level in
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