(Updates to early afternoon, changes byline)
* Producer price data fuels inflation worries
* Record-high oil prices add to negative sentiment
* Bank shares fall after analyst's gloomy forecast
By Kristina Cooke
NEW YORK, May 20 U.S. stocks slid on Tuesday
after oil prices jumped above $129 a barrel and a key inflation
gauge rose more than expected, adding to mounting concerns
about U.S. consumers' discretionary spending power.
Weak quarterly results and outlooks from discount retailer
Target Corp (TGT.N) and home improvement chain Home Depot Inc
(HD.N) further underscored how consumers are struggling as
gasoline prices soar and the value of their homes drops.
Bank shares were the biggest drags on the S&P 500 and the
Dow, after an influential analyst warned that the credit crisis
was far from over.
The tone was set early in the session, after the U.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 pullback on some concerns about inflation and higher
oil is not all that surprising after last week's gains," said
Richard Sparks, senior equities analyst at Schaeffer's
Investment Research in Cincinnati.
The Dow Jones industrial average .DJI slid 223.09 points,
or 1.71 percent, to 12,805.07. The Standard & Poor's 500 Index
.SPX was down 14.64 points, or 1.03 percent, at 1,411.99,
while the Nasdaq Composite Index .IXIC was down 28.33 points,
or 1.13 percent, at 2,487.76.
JPMorgan, the No. 3 U.S. bank, dropped 4.8 percent to
$43.78 on the New York Stock Exchange, while shares of
Citigroup Inc (C.N), the largest U.S. bank, declined 3.9
percent to $22.08.
Meredith Whitney, banking analyst at Oppenheimer & Co, said
the credit crisis will result in three years of
multibillion-dollar revenue declines for banks. For details,
Technology shares also took a heavy beating. Chipmaker
Intel Corp (INTC.O) was down more than 3 percent a day after
data-storage memory chip maker SanDisk Corp SNDK.O warned
higher oil prices will hurt consumer spending on technology.
Intel dropped to $24.10, putting the stock among the top
drags. SanDisk shares tumbled 3.6 percent to $28.95.
Shares of Home Depot, the largest U.S. home improvement
chain, fell 6 percent to $27.12 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.
The only two companies escaping the sell-off on the Dow
industrials were Chevron Corp (CVX.N) and Exxon Mobil (XOM.N),
which benefited from the latest record high in oil prices.
(Reporting by Kristina Cooke; editing by Gary Crosse)