Wall St slips in sell-off's 3rd day as oil jumps

By @ibtimes on

U.S. stocks fell for a third day on Thursday as U.S. crude oil prices hovered near $100 a barrel on violence in Libya.

Oil's sharp rise this week has fueled worries about the effect of energy costs on consumers and business. U.S. crude oil futures were at their highest since late August 2008, as the escalating problems in Libya sparked supply worries. Brent crude futures hit an intraday high at $119.79 and then pulled back to $114.45 at midday.

Oil does have an economic slowing impact as the price goes, and so the question is, 'How long will this last?' and 'How significant will it be?' ... It's hard to decide at the moment, said Stephen Lieber, chief investment officer of the Purchase, New York-based Alpine Mutual Funds.

Investors may need to take a wait-and-see attitude until there's a clearer idea of how events in Libya and elsewhere will turn out, he said.

My bias is that we are still likely to be in a recovering economy, and if this creates dumping of securities and potential undervaluation, be ready to take advantage of it.

The S&P 500 was holding above support, suggesting a bigger pullback may not be in store for the market just yet.

The week's declines have driven calls that a correction is near. The S&P 500 is up about 24 percent since the start of September, roughly when the recent rally began.

The CBOE Volatility Index <.VIX>, Wall Street's fear gauge, was down 0.5 percent at 22.02, reversing course for the first time in two days. The index has an inverse correlation to the S&P 500, indicating stocks could rise.

Helping to limit the Nasdaq's loss was Priceline.com Inc , which jumped 7.2 percent to $456.55 after a number of brokerages raised their price targets on the stock. The online travel agency reported a larger-than-expected profit late Wednesday.

The Dow Jones industrial average <.DJI> was down 70.43 points, or 0.58 percent, at 12,035.35. The Standard & Poor's 500 Index <.SPX> was down 6.37 points, or 0.49 percent, at 1,301.03. The Nasdaq Composite Index <.IXIC> was down 1.57 points, or 0.06 percent, at 2,721.42.

General Motors Co's earnings topped estimates, but the stock slid 4.1 percent to $33.16.

The S&P 500 was trading just above support at 1,296, the index's January highs, while analysts were also eyeing the S&P 500's 50-day moving average -- now at 1,287 as further support.

A break below those levels could indicate further weakness lies ahead.

(Reporting by Caroline Valetkevitch; Additional reporting by Angela Moon; Editing by Jan Paschal)

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