September 16, 2019 / 4:11 PM / a month ago

US STOCKS-Wall St drops after Saudi attacks; energy stocks limit losses

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* Energy sector jumps more than 2%

* Airlines, cruise operators fall on cost concerns

* Defense cos rise amid geopolitical tensions

* United Auto Workers call for strike on GM; shares fall

* Indexes down: Dow 0.49%, S&P 0.35%, Nasdaq 0.30% (Changes comment, adds details; Updates prices)

By Medha Singh and Ambar Warrick

Sept 16 (Reuters) - U.S. stocks fell on Monday on global growth worries after weekend attacks on Saudi Arabia’s crude facilities hit 5% of the world’s supply, but a sharp jump in crude prices lifted beaten-down energy stocks and kept losses in check.

The attack on the world’s biggest oil exporter sent oil prices up more than 20% before easing as various nations said they would tap emergency reserves to ensure stable supplies.

The S&P 500 energy, one of the worst performing sectors so far this year, soared 2.36%. Shares of Apache Corp , Marathon Oil Corp and Hess Corp jumped between 8.8% and 10.1% and were the leading gainers on the benchmark index.

“The oil spike - higher prices globally - could slow world spending on items other than oil and that’s the main concern,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Market spotlight shifted to the drone attacks from this week’s centerpiece, the U.S. Federal Reserve’s two-day monetary policy meeting where expectations of a quarter point interest rate cut remain high.

Anticipation of higher fuel costs drove down shares of airlines and cruise line operators. American Airlines Group Inc , Delta Air Lines Inc and Carnival Corp fell between 2.2% and 5.1%.

Investors’ flight to safety pulled the U.S. benchmark 10-year Treasury bond yields down from their multi-week highs, sending the interest-rate sensitive bank sub-sector down about 0.6%.

Shares of defense companies Raytheon, Lockheed Martin Corp, Northrop Grumman Corp rose between 1.1% and 2.6%. J.P. Morgan upgraded Raytheon shares to “overweight”.

At 11:34 a.m. ET, the Dow Jones Industrial Average was down 133.39 points, or 0.49%, at 27,086.13, the S&P 500 was down 10.50 points, or 0.35%, at 2,996.89. The Nasdaq Composite was down 24.42 points, or 0.30%, at 8,152.29.

Nine of the 11 major S&P sectors were trading lower.

Wall Street’s more than a decade-long rally continues to hinge on whether the Fed will keep cutting interest rates and on the progress in U.S.-China trade talks. The recent easing in trade tensions has brought the benchmark S&P 500 about 1% below its record high.

Among other movers, General Motors Co fell 3.1% after the United Auto Workers (UAW) went on strike on Sunday, the first nationwide strike at GM in 12 years.

Advancing issues outnumbered decliners by a 1.14-to-1 ratio on the NYSE and a 1.14-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and one new lows, while the Nasdaq recorded 32 new highs and 17 new lows. (Reporting by Medha Singh and Ambar Warrick in Bengaluru Editing by Saumyadeb Chakrabarty and Arun Koyyur)

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