U.S. stocks fell for a second day, as oil prices surged past $132 a barrel after data showed a drop in crude supplies which boosted concerns that inflation will affect the rate at which U.S. consumes, while financial companies fell on concern computer errors at Moody's Investors Service may result in bond downgrades.
Crude oil reached a record high of $132.08, boosted by a weaker dollar, supply concerns, and bullish calls by investment banks pushing big oil giants Exxon Mobil and Chevron higher.
The Standard & Poor's 500 Index lost 1.05 points, or 0.1 percent, to 1,412.35 at 12 p.m. in New York. The Dow Jones Industrial Average slid 53.9, or 0.4 percent, to 12,774.78. The Nasdaq Composite Index fell 2.95, or 0.1 percent, to 2,489.31.
Moody's Corp., the world's second-largest credit-rating company, plunged the most in 9 years after announcing its investigating whether it may have mistakenly assigned A ratings to debt securities which later dropped in value.
Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, fell after its second-quarter earnings estimate was cut 93 percent by Merrill Lynch & Co. analysts. Shares were down 4.2 percent to $40.24.
Home Depot Inc., the world's largest home-improvement retailer, led a retreat in consumer shares after crude oil climbed above $132 a barrel. Shares were down 1.2 percent to $27.04. The retailer reported a 66 percent drop in first-quarter profit on Tuesday.
Time Warner Inc., the world's largest media company, rallied 3.4 percent to $31.24 after agreeing with Time Warner Cable Inc. on a legal and structural separation and a $10.9 billion one-time cash dividend.
The news sent shares of Time Warner up 2.2 percent to $16.50, and shares of the cable unit rose 2.3 percent to $30.91.