NEW YORK (Reuters) – Wall Street stocks fell on Tuesday as a revolt spread in oil exporter Libya, but investors seemed willing to buy on price dips after U.S. consumer confidence rose to its highest in three years.
Oil prices hit a 2-1/2 year high on concerns the unrest could disrupt supplies from the Middle East. NYMEX crude oil futures jumped 5.3 percent to over $94 per barrel.
Higher oil prices lifted some energy shares but hit the wider market on concerns they would translate into higher costs. The Arca airline index (.XAL) fell 4.2 percent, with Delta Air Lines Inc (DAL.N) down 7 percent to $10.70.
The S&P energy sector (.GSPE) was the only rising sector, gaining more than 1 percent.
Highlighting the optimism about the U.S. recovery, which bulls have emphasized throughout the turmoil overseas, consumer confidence rose in February to a three-year high, prompting stocks to cut some of their earlier losses.
«Just as we showed incredible resilience with Egypt, we continue to look inward and get excited about the recovery going on within our borders,» said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.
The Dow Jones industrial average (.DJI) dropped 71.29 points, or 0.58 percent, to 12,319.96. The Standard & Poor’s 500 Index (.SPX) fell 10.95 points, or 0.82 percent, to 1,332.06. The Nasdaq Composite Index (.IXIC) lost 33.33 points, or 1.18 percent, to 2,800.62.
Libyan leader Muammar Gaddafi used tanks, helicopters and warplanes to quell a growing revolt and scoffed at reports he was fleeing after four decades in power.
The CBOE Volatility Index (.VIX), Wall Street’s so-called fear gauge, rose 13.3 percent to 18.61.
U.S. consumer confidence rose in February to a three-year high on improved optimism about the economy and income prospects, according to a private sector report on Tuesday.
Shares of Wal-Mart Stores Inc (WMT.N) fell 3.5 percent to $53.44 after the world’s largest retailer posted its seventh straight drop in U.S. sales.
Home Depot Inc (HD.N) beat profit and sales estimates and raised its fiscal-year outlook as homeowners took up maintenance projects. The shares rose before dipping 0.6 percent to $38.28.