US STOCKS-Record oil, housing woes push market lower

NEW YORK, May 6 (Reuters) - U.S. stocks fell on Tuesday as record-high oil prices put pressure on consumers and energy-dependent industries and a huge loss and dividend cut by Fannie Mae reminded investors of the troubles still facing U.S. housing and credit markets.

Fannie Mae , the largest provider of U.S. home financing, reported a net $2.5 billion loss and said it sees significant credit losses into 2009.

"We need housing to bottom for this market to stabilize, and Fannie tells you that it's nowhere near it," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The Dow Jones industrial average was down 78.25 points, or 0.60 percent, at 12,891.29. The Standard & Poor's 500 Index was down 6.57 points, or 0.47 percent, at 1,400.92. The Nasdaq Composite Index was down 14.26 points, or 0.58 percent, at 2,449.86.

Fannie shares opened more than 5 percent lower but bounced back after Moody's Investors Service affirmed Fannie's "Aaa" senior debt rating. Fannie shares were 1.4 percent higher at $28.72. Shares of Freddie Mac, Fannie's smaller rival, were down 1.4 percent at $25.16.

Further weighing on financial shares, money manager Legg Mason Inc posted a quarterly loss, merger adviser Lazard Ltd reported a 71 percent drop in earnings and Swiss bank UBS said it will cut 5,500 employees because of subprime and other credit losses.

Legg Mason shares were down 5.9 percent at $59.03. Lazard stock fell 9.3 percent to $34.

Banking stocks were already rattled on Monday by doubts about Bank of America's takeover of troubled mortgage lender Countrywide Financial Corp . Bank of America said late on Monday it remains committed to the takeover deal.

Countrywide stock was down 2.4 percent at $5.28 and Bank of America lost 1.6 percent to $38.37.

D.R. Horton Inc , the No.1 U.S. home builder, posted a large quarterly loss on lower land values, its inventory of unsold homes and aggressive price cuts to attract buyers. D.R. Horton shares fell 2.3 percent to $15.61.

Energy shares extended Monday's gains after Anadarko Petroleum posted better-than-expected earnings late on Monday and crude oil futures jumped $1.64 to $121.61 per barrel after touching a record high of $122.

Anadarko shares jumped 9.6 percent to $74.62. Hess Corp shares were another top gainer in the oil patch, rising 7.5 percent to $57.08.

The higher price for crude pummeled airline stocks for a second-straight session. The American Stock Exchange index of airlines was down 4.4 percent. Its worst performer was UAL Corp , the operator of United Airlines, which fell nearly 7 percent to $13.96. (Editing by Kenneth Barry)

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