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Wednesday May 14, 2:33 AM
US STOCKS-Oil price, financials weigh on Dow; techs flat*Market falls as oil hits record high *Bernanke says market recovery incomplete
By Caroline Valetkevitch NEW YORK, May 13 (Reuters) - U.S. stocks declined on Tuesday as oil rose to another record, underscoring concerns about inflation, and the Federal Reserve chairman said financial markets are still troubled. Fed chief Ben Bernanke said strong demand from financial institutions to borrow from the Fed showed "markets are still far from normal." Shares of financial companies led declines on the S&P 500 index, with JPMorgan Chase & Co down 2.6 percent at $46.01. The Nasdaq composite index was little changed, however, after a jump in shares of Yahoo Inc limited the index's losses. Cable network CNBC said Carl Icahn is considering launching a proxy fight at the Internet company after talks between Yahoo and Microsoft about a takeover were abandoned. Yahoo shares rose more than 2 percent to $25.97. Crude oil futures came within a whisker of $127 per barrel before retreating a bit. "Oil is still up a buck and change. I think that's putting a little bit of a damper on the market," said Victor Pugliese, director of listed equity trading at Broadpoint Securities in San Francisco. The Dow Jones industrial average was down 56.59 points, or 0.44 percent, at 12,819.72. The Standard & Poor's 500 Index was down 1.53 points, or 0.11 percent, at 1,402.05. The Nasdaq Composite Index was down 0.31 points, or 0.01 percent, at 2,488.18. U.S. crude rose 1.4 percent to $125.89 a barrel after hitting an all-time high of $126.98. Also weighing on the financial sector was news that an influential analyst at Oppenheimer cut her price targets on Goldman Sachs , Lehman Brothers , Merrill Lynch and Morgan Stanley . Analyst Meredith Whitney said the outlook was bleaker than reflected in the market. The S&P financial index fell 1.1 percent. Hewlett-Packard shares dragged on market indexes after it struck a deal to buy Electronic Data Systems for $12.6 billion. Some Wall Street analysts criticized the deal, saying HP was paying a rich premium for a slow-growing business. Hewlett-Packard was the top weight on the S&P 500 and the Dow, with its shares down 6.6 percent at $43.65. Wal-Mart Stores Inc posted stronger-than-expected earnings but indicated results for the current quarter could have trouble hitting Wall Street's estimates as customers struggle. Shares were down 1.8 percent at $56.95. The retailer's outlook contrasted with data showing a surprising rise in retail sales last month when auto sales are excluded. But including auto purchases, retail sales fell last month. Also on the Nasdaq, shares of Apple Inc rose 1.1 percent to $190.14. Apple said its iTunes online store will begin selling HBO cable network shows. (Additonal reporting by Cal Mankowski; Editing by Kenneth Barry)
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