Profit worry, higher oil weigh on Wall St
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By Caroline ValetkevitchNEW YORK (Reuters) - Stocks slipped on Wednesday as United Parcel Service Inc's forecast for earnings shortfall and a surge in oil prices dampened the outlook for corporate results.The Nasdaq was down 1 percent.Stocks extended declines before midday as oil prices advanced and shares of Morgan Stanley helped drag down financials. The investment bank said that more of its assets became illiquid or hard to value during the first quarter.The lowered profit forecast from UPS fueled fears that fallout from the U.S. housing slump has hurt other parts of the economy. General Electric Co , a large manufacturer and a Dow component, also declined."UPS had an earnings warnings and that could portend more lowering of earnings guidance," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois. "Companies are making comments about what the rest of the year is going to look like, and that's what the market is going to be focusing on in the short term."U.S. crude oil futures rose to near-record levels as government data showed a surprising draw on crude stockpiles last week. An index of retail shares <.RLX> slid 2.6 percent, with high energy costs likely to hit consumer spending.The Dow Jones industrial average <.DJI> fell 69.86 points, or 0.56 percent, to 12,506.58. The Standard & Poor's 500 Index <.SPX> was down 9.29 points, or 0.68 percent, at 1,356.25. The Nasdaq Composite Index <.IXIC> was down 23.78 points, or 1.01 percent, at 2,324.98.Oil was last up $2.55 at $111.05 a barrel.On Nasdaq, shares of Research In Motion Ltd , the maker of the BlackBerry, declined 1.7 percent to $118.94. The stock was started with a "hold" rating at Needham, a brokerage.Apple Inc , down 1.2 percent at $150.93, also weighed on the Nasdaq. This week, Apple received its sole "underperform" rating, from Morgan Keegan.Shares of Morgan Stanley dropped 2.6 percent to $46.12 while an S&P index of financial stocks <.GSPF> slipped 1.1 percent."That's part of the weakness. Morgan Stanley is putting a little more concern back into financials," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.UPS shares fell 3.3 percent to $70.91 on the New York Stock Exchange, while shares of GE, which is due to post quarterly results on Friday, shed 1.2 percent to $36.49.On Tuesday, minutes from the Federal Reserve's policy-setting meeting showed Fed economists expected the economy to contract in the first six months of 2008, a scenario that could curb the appetite for stocks as profit growth falters.(Additional reporting by Ellis Mnyandu; Editing by Jan Paschal)
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