U.S. stocks fell on Friday, extending the biggest weekly retreat since February and placed the market on track for weekly losses as crude oil resumed its surge to top $133 a barrel.
The S&P 500 slipped 17.27 points, or 1.2 percent, to 1,377.08 at 11:46 a.m. in New York. The Dow Jones Industrial Average lost 126.36, or 1 percent, to 12,499.26. The Nasdaq Composite Index sank 27.94 to 2,436.64.
The market's losses increased after a report said inventories of unsold U.S. homes soared to a 23-year high in April. All five homebuilders in the Standard & Poor's 500 Index slid on an industry report showing sales of previously owned homes matched an all-time low in April.
Market activity remained subdued, as many traders were absent ahead of the three-day Memorial Day weekend.
Oil resumed its climb ahead of the long holiday weekend. Crude for July delivery was last up $2.01, or 1.5 percent, to $132.81 a barrel on the New York Mercantile Exchange, as supply concerns mounted ahead of the Atlantic hurricane season starting June 1.
Retailers declined as oil continued to rise. Nordstrom Inc. led retailers to a six-week low, dropping 4.6 percent to $33.04. Wal-Mart Stores Inc., the largest retailer, retreated 46 cents to $55.59. Gap late Thursday reported a 40 percent profit rise after limiting its reliance on profit-eroding discounts.
Ford Motor Co. fell for a sixth straight day, after the second-biggest U.S. automaker said consumers are buying fewer trucks as fuel prices climb to records. The car marker estimates that full-size pickups fell to 9 percent of the U.S. market compared with 14.1 percent in 2007, Chief Executive Alan Mulally said yesterday in Detroit. Ford decreased 41 cents, or 5.7 percent, to $6.75.
Morgan Stanley upped Dell Inc. to overweight from equal-weight and downgraded Sun Microsystems on Friday, saying the computer hardware and software maker is at risk as demand shifts downstream and pricing pressure increase.
Sun Microsystems was recently down 42 cents to $12.73 while Dell gained 31 cents to $21.20.