US stocks tumble after Saudi attack

US blue-chip stocks fell on Monday as oil prices nudged higher after an attack on a US consulate in Saudi Arabia, but technology stocks rose, helped by a broker’s hike in earnings and revenue estimates for Apple Computer.

US crude oil futures rose 44 cents to $US42.98, renewing concerns about the impact high crude prices have on corporate profits and consumer spending.

However, oil trimmed its earlier gains, when it reached $US43.60, to give some relief to stocks.

“The market has come back a bit. Really, what’s moving the market is oil,” said Stephen Carl, principal and head of US equity trading, The Williams Capital Group LP.

Oil trimmed earlier gains, “so the market’s coming back,” he said.

The blue-chip Dow Jones Industrial Average was down 29.63 points, or 0.28 per cent, at 10,562.58.

The broad Standard & Poor’s 500 Index was nearly flat, up 0.01 points, or 0.00 per cent, at 1191.18. The Nasdaq Composite Index added 6.70 points, or 0.31 per cent, at 2154.66.

Apple gave some support to the Nasdaq, rising 5 per cent to $US65.73, after JP Morgan raised its revenue and earnings per share estimates, citing expectations for strong holiday sales.

Software company Oracle also helped, rising nearly 3 per cent to $US13.42. Oracle is demonstrating its database software technology this week in San Francisco to customers.

And Intel was 1.1 per cent higher at $US24.17, extending its gains on Friday when it gained 5 per cent after raising its sales forecast.

“I think we’re seeing some follow-through on Intel,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co.

“Intel has some coat-tails to the industry. They will be talking to analysts this week, explaining more about their guidance and inventory reduction, which is generally thought of to be a positive meeting for the technology sector.”

Technology stocks were also in focus ahead of a technology conference given by Lehman Brothers, starting on Wednesday, featuring finance chiefs of a number of semiconductor and hardware systems companies.

But the broader markets were lacklustre, as traders were concerned about the attack by suspected Muslim militants on a US consulate in Saudi Arabia and explosions in northern Spain that followed bomb threats from the Basque separatist group ETA, as well as the nudge up in oil prices.

The latest developments meant there was “going to be a geopolitical pall” over the market, said Carl.

Meanwhile, drugmakers Pfizer Inc. and Wyeth fell after Merrill Lynch cut its rating on them both to “neutral” from “buy.”

Wyeth fell 3.5 per cent to $US40.12 and Pfizer was down 2.3 per cent to $US27.24.

In addition, investor worries about lackluster consumer spending this holiday season contributed to stocks’ decline.

Wal-Mart Stores Inc. slipped 0.3 percent to $US52.76 after it made a lower-than-usual forecast for December sales growth and electronic retail chain Circuit City Stores tumbled 7 per cent to $US15.08 after the electronics chain reported a drop in sales.

AAP