US stocks fall on Libya tension

NEW YORK (AP) – Stocks fell for a second straight day Wednesday after clashes in Libya sent oil prices to two-year highs and technology giant Hewlett-Packard said its revenue growth was slowing.

The Dow Jones industrial average lost 107.01 points, or 0.9 percent, to 12,105.78. The S&P 500 fell 8.04, or 0.6 percent, to 1,307.40. The Nasdaq composite fell 33.43, or 1.2 percent, to 2,722.99.

Forces loyal to Libyan leader Moammar Gadhafi continued to fight with anti-government demonstrators, leading to widespread chaos and shooting in the streets of the Libyan capital, Tripoli. Nearly 300 people have been killed, according to the New York-based Human Rights Watch.

The unrest sent oil up 3.5 percent to nearly $99 a barrel, its highest price since October 2008. Libya is the world’s 15th largest exporter of crude, accounting for two percent of global daily output.

Traders are worried the revolt could threaten Libya’s oil production and spread to other countries in the region.

“We’re at a point where the market is concerned over this series of dominoes in the Middle East and wonders if there’s another country that’s next to fall,” said David Katz, a portfolio strategist for Weiser Capital Management.

Oil companies benefited from the higher crude prices. Chevron Corp. was the biggest gainer in the Dow average, rising 1.9 percent.

Exxon Mobil Corp also gained 1.9 percent. Energy companies in the Standard & Poor’s 500 index rose two percent, the only gain among its 10 company groups.

Each major index has gained more than 10 percent over the last three months, leading some analysts to say that the situation in Libya is giving traders an opportunity to sell and lock in profits after the market’s recent run-up.

The market’s two-day stumble is only its second significant decline this year. The other came on Jan. 28, when protests in Egypt escalated.

“The market has strong fundamentals and those will once again dominate very shortly,” said Doug Cote, senior market strategist with ING Investment Management.

Technology stocks fell after Hewlett-Packard Co., a bellwether for the group, gave a disappointing revenue forecast for the current fiscal year. The stock fell 9.6 percent, the most out of the 30 that make up the Dow average.