US stocks fell on Friday, with oil prices ending near a record $60 a barrel raising worries about energy costs hurting corporate profits and curbing consumer spending. The Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq Composite all posted their worst weekly percentage declines in more than two months.
High crude prices weighed on shares of heavy equipment maker Caterpillar Inc and discount retailer Wal-Mart Stores Inc.
Memory chip maker Micron Technology Inc posted its largest quarterly loss in two years. Micron hurt shares in the semiconductor sector, while network equipment-maker Cisco Systems Inc fell after one of its suppliers Solectron Corp posted lower sales.
The Dow Jones industrial average tumbled 123.60 points, or 1.19 percent, to end at 10,297.84. The Standard & Poor's 500 Index dropped 9.16 points, or 0.76 percent, to close at 1,191.57. The technology-laced Nasdaq Composite Index lost 17.39 points, or 0.84 percent, to finish at 2,053.27.
For the week, the Dow fell 3.06 percent, the S&P 500 declined 2.09 percent and Nasdaq was off 1.76 percent. "It is disconcerting to see oil hover around $60 a barrel. But this could be a resistance level, and if you think oil prices will go beyond $60 a barrel, it makes you nervous," said Neil Massa, senior trader at John Hancock Funds. "On the technology side, it was more than Micron weighing. Solectron led to the thinking that Cisco's earnings won't be as good."
OIL PLAYS VILLAIN AGAIN: US crude oil futures ended higher on Friday, marking the highest settlement for a prompt crude contract, with worries of potential supply tightness in the months ahead amid strong demand.
Crude for August delivery settled up 42 cents at $59.84 a barrel. Shares of Dow industrial companies that are benchmarks of the US economy fell as oil prices advanced, with heavy-equipment maker Caterpillar losing 1.6 percent, or $1.61, to $96.86 and chemicals maker DuPont Co sliding 1.7 percent, or 75 cents, to $44.68.
Shares of Dow component Wal-Mart, the world's biggest retailer, slipped 1 percent, or 51 cents, to $47.37 and Target Corp, the No 2 US discount retail chain, fell 1.7 percent, or 96 cents, to $54.07. Soaring energy prices hurt discount chains because the stores cater to lower-income shoppers who are spending a larger portion of their budgets on gasoline.
Among other leading Dow decliners, Alcoa Inc shares slid 2.7 percent, or 73 cents, to $26.46. The world's largest aluminium maker said after Thursday's closing bell that it would cut 6,500 jobs as part of a second phase of restructuring.
MICRON, CISCO WEIGH ON TECHS: A severe decline in the price of computer memory chips pushed Micron to its largest quarterly loss in two years, sending its shares down 2.3 percent to $10.58 on the New York Stock Exchange. The Philadelphia Stock Exchange's semiconductor Index fell 1.9 percent.
Meanwhile, contract electronics manufacturer Solectron fell 4.2 percent to $3.66 after posting lower sales amid weaker demand in its networking and consumer electronics markets. Network equipment maker Cisco, a Solectron customer, fell 2.4 percent to $19.30.
Guidant Corp fell 6.9 percent, or $4.70, to $63.90 after the company advised doctors to stop implanting some of its most sophisticated heart defibrillators, saying the devices may be faulty and may have to be recalled.
On the economic front, a government report showed that durable goods orders, excluding a surge in Boeing's jet aircraft orders, unexpectedly fell in May.
At the close of trading, the annual reconstitution of the Russell indexes took effect. Some 400 stocks were being added or deleted, based on their market capitalisation.
Volume was active, with 2.04 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. On Nasdaq, about 2.39 billion shares traded - above the 1.81 billion daily average last year.