U.S. stocks traded lower on Tuesday as a jump in oil prices renewed fears of hampered economic activity, offsetting a positive reading on manufacturing.
April U.S. crude futures added 1.3 percent to $98.26 per barrel, while Brent rose above $113 on continued concerns about supply disruptions amid unrest in Libya.
High oil prices are essentially a huge tax on consumers, who make up two-thirds the economy. So there's no way (gross domestic product) won't suffer on this, said Scott Armiger, portfolio manager at Christiana Trust in Greenville, Delaware, which has $6.8 billion in client assets.
The S&P had its weakest performance since November last week on concerns that high oil prices would stifle economic activity.
In testimony to the U.S. Senate Banking Committee, U.S. Federal Reserve Chairman Ben Bernanke said higher oil prices were unlikely to have a big impact on the U.S. economy, but they could lead to weaker growth if sustained.
The Dow Jones industrial average <.DJI> was down 48.32 points, or 0.40 percent, at 12,178.02. The Standard & Poor's 500 Index <.SPX> was down 7.35 points, or 0.55 percent, at 1,319.87. The Nasdaq Composite Index <.IXIC> was down 20.63 points, or 0.74 percent, at 2,761.64.
For the past seven months, stocks have risen on the first day of the month. The S&P rose 3.2 percent in February.
The U.S. manufacturing sector grew in February at its fastest rate since May 2004, while construction spending fell more than expected in January.
(Editing by Jeffrey Benkoe)