U.S. stocks dropped for a second day on Wednesday after United Parcel Service Inc. said shipments are slowing and crude oil topped $111 a barrel raising concerns about the economy.

After reaching an early high of 12,621, the Dow Jones Industrial Average lost 82.80, or 0.7 percent, to 12,493.64 at 12:55 a.m. in New York. The Standard & Poor's 500 Index fell 11.37 points, or 0.8 percent, to 1,354.17. The Nasdaq Composite Index decreased 27.89, or 1.2 percent, to 2,320.87.

UPS, the world's largest package-delivery company, dropped the most since July 2006. The company said it reduced its profit estimate on higher fuel prices which dented its expected results.

The Atlanta-based shipping company lost $2.43, or 3.3 percent, to $70.88. Earnings were 86 cents to 87 cents a share, down from a prior projection of 94 cents to 98 cents.

Retailers fell 1.7 percent as a group, after Amazon.com Inc. dropped 4.1 percent and Google lost $7.63 to $460.18.

Boeing Co. gained the most in the Dow average, rising $4.53, or 6 percent, to $79.54. The world's second-largest commercial maker of jets delayed the commercial release of its 787 Dreamliner to the third quarter of 2009 instead of first quarter. Boeing said the delay will not affect its 2008 projections.

Also supporting the blue-chip average, Citigroup Inc. gained 0.1 percent to $23.86, after media reports said Citi is in talks to sell $12 billion in debt for nearly 90 cents on the dollar. The leveraged loans will be sold to Apollo Management LP, Blackstone Group LP and TPG Inc. as part of an effort to shrink the bank's balance sheet.

In finance, Washington Mutual Inc. Dropped 42 cents to $11.39. The bank rejected an offer from JPMorgan Chase & Co. to buy it for as much as $8 a share, or $7 billion, before announcing yesterday it received a $7 billion capital infusion from a group led by TPG Inc.

Crude futures jumped 2.5% to $111.18 a barrel, after news of a drop in weekly crude inventories.

Gold futures also gained, with the contract for June delivery up $10.60 to $928.50 an ounce on the New York Mercantile Exchange