US STOCKS-Wall St drops on oil surge, bank jitters
ju4 wa4i dia4n zo1ng he2 ba4o da4o :\n  (Updates to midday, changes byline)\n* Oil rebound stirs caution about inflation\n* Financials touch 5-year low after Goldman rumors\n* Alcoa drags on Dow after broker downgrade\nBy Cal Mankowski\nNEW YORK, June 11 (Reuters) - U.S. stocks fell on\nWednesday after a bigger-than-expected drop in U.S. crude oil\ninventories drove oil prices higher, stoking fears about\ninflation and the effect on consumers.\nSentiment soured further on fears of more trouble in the\nfinancial sector. Traders said there was talk that Goldman\nSachs <GS.N> , the largest U.S. investment bank by market\nvalue, may have to write off bad loans. A Goldman Sachs\nspokesman said the company does not comment on market rumors.\nThe S&P financial subindex <.GSPF> sank briefly to a\n5-year low, while Goldman shares slid 2 percent.\nOil futures jumped nearly 5 percent to more than $137 a\nbarrel.\nShares of energy-intensive companies, including airlines,\ntook a beating. Delta Air Lines <DAL.N> was down 6.2 percent\nat $5.56 on the New York Stock Exchange, while package\ndelivery company FedEx Corp <FDX.N> slid almost 3 percent to\nShares of retailers also fell, with Wal-Mart Stores Inc\n<WMT.N> down almost 1.5 percent at $58.88.\nCrude oil "inventories were taken down more sharply than\nexpected," said Al Goldman, chief market strategist at\nWachovia Securities in St. Louis. "There have been some wild\nand wooly projections on where oil is going and this kind of\nfed into it."\nGoldman, who believes that the stock market is in the\nprocess of finding a bottom, said that global demand for oil\nproducts is coming down and domestic gasoline consumption has\nfallen. But he said that for now, the stock market is "held\ncaptive by the price of oil."\nThe Dow Jones industrial average <.DJI> fell 168.46\npoints, or 1.37 percent, to 12,121.30. The Standard & Poor's\n500 Index <.SPX> declined 17.14 points, or 1.26 percent, to\n1,341.30. The Nasdaq Composite Index <.IXIC> lost 41.55\npoints, or 1.70 percent, to 2,407.39.\nAlcoa Inc <AA.N> was the top drag on the Dow, falling 6.2\npercent to $40.07 after JPMorgan cut its rating on the\naluminum producer.\nAmong financial shares, Goldman Sachs fell 2.1 percent to\nInvestment bank Lehman Brothers Holdings Inc <LEH.N> lost\n6.6 percent to $25.68. The Financial Times reported that\nLehman almost struck a deal with Korean financial institutions\nas part of raising $6 billion in capital and may yet arrange\none by the end of the year.[ID:nSEO345738].\nA spokesman for Lehman declined to comment.\nTechnology shares and financial shares were the weakest\nsectors in a broad decline.\nOn Nasdaq, shares of iPod and iPhone maker Apple Inc\n<AAPL.O> slid 2.4 percent to $181.20. Apple was the heaviest\nweight on the Nasdaq 100 <.NDX> index.\nChip maker Intel Corp <INTC.O> was a drag on the S&P 500\nand the Nasdaq, falling 2.7 percent to $22.08 in Nasdaq\ntrading.\nInternational Business Machines Corp <IBM.N> was among the\nDow's biggest decliners. IBM fell 2.1 percent to $123.36 on\nthe New York Stock Exchange.\nA bright spot was U.S. office supplies company Staples\n<SPLS.O>, whose shares rose 4.5 percent to $24.20 on the\nNasdaq. Staples won its battle to buy Corporate Express\n<CXP.AS> after the Dutch office supplies firm agreed to a\nsweetened bid of $2.65 billion.\n(Additional reporting by Ellis Mnyandu; Editing by Jan\nPaschal)\n((cal.mankowski@thomsonreuters.com ; 1 646 223 6132; Reuters\nMessaging: cal.mankowski.reuters.com@reuters.net ))\n((Multimedia versions of Reuters Top News are now available\nfor: * 3000 Xtra: visit http://topnews.session.rservices.com *\nBridgeStation: view story .134 For more information on Top\nNews: http://topnews.reuters.com))\nKeywords: MARKETS STOCKS