By Cal Mankowski
NEW YORK (Reuters) - U.S. stocks fell on Tuesday after oil leaped above $129 per barrel and producer prices, excluding food and energy costs, rose more than expected, adding to concerns about inflation.
The Dow industrials and Nasdaq were down 1 percent each.
Discount retailer Target Corp
The retailers' quarterly results and outlooks gave further evidence that consumers are buckling under falling home values and soaring gasoline prices.
The government's Producer Price Index, excluding volatile food and energy costs, rose 0.4 percent last month. The rise for the year through April was the largest since 1991.
"The big question in the market is how consumer spending holds up in the midst of high energy prices and all of the problems that we're having," said Frank Lesh, futures analyst and broker at FuturePath Trading LLC in Chicago. "New highs again for crude oil add to this fear."
Lesh said it was troubling that year-over-year core PPI was 3 percent, well above the Fed's 2 percent target.
The Dow Jones industrial average <.DJI> tumbled 172.12 points, or 1.32 percent, to 12,856.04. The Standard & Poor's 500 Index <.SPX> declined 10.33 points, or 0.72 percent, to 1,416.30. The Nasdaq Composite Index <.IXIC> fell 22.57 points, or 0.90 percent, to 2,493.52.
Shares of banks, including JPMorgan Chase & Co
Meredith Whitney, banking analyst at Oppenheimer & Co, said the credit crisis will result in three years of multibillion dollar revenue declines for banks.
JPMorgan, the No. 3 U.S. bank, dropped 3.3 percent to $44.46 on the New York Stock Exchange, while shares of Citigroup Inc
Technology shares also took a heavy beating. Chip maker Intel Corp
Intel dropped to $24.10, putting the stock among the top drags. SanDisk shares tumbled 3.5 percent to $28.98.
Shares of Home Depot, the largest U.S. home improvement chain, fell 5.4 percent to $27.30 after the retailer posted a 66 percent slide in quarterly profit.
Target fell 0.8 percent to $54.48 after it said its sales growth will likely remain sluggish until the U.S. economic environment improves or stabilizes.
Among home builders, shares of Toll Brothers
(Additional reporting by Ellis Mnyandu; Editing by Kenneth Barry)