Stocks slide for a third day on worries about oil

File photo: Traders work on the floor of the New York Stock Exchange before the closing bell February 22, 2011 in New York City.
File photo: Traders work on the floor of the New York Stock Exchange before the closing bell February 22, 2011 in New York City. Mario Tama/Getty Images

Stocks fell for the third straight day Wednesday as surging oil prices overshadowed signs of an improving job market.

Oil prices neared $100 a barrel as clashes in Libya intensified between forces loyal to Moammar Gadhafi and anti-government protesters. Rebels control much of the eastern part of the country, effectively splitting Libya into two.

Libya is the world's 15th largest exporter of crude, accounting for 2 percent of global daily output. Traders are worried the revolt could threaten Libya's oil production and spread to other countries in the region, such as oil-rich Saudi Arabia. Higher oil prices can also slow the U.S. economy by increasing transportation costs.

The Dow Jones industrial average fell 79 points, or 0.7 percent, to 12,026. The Standard & Poor's 500 index fell 7, or 0.5 percent, to 1,300. The Nasdaq composite fell 3, or 0.1 percent, to 2,719.

The Labor Department said fewer people applied for unemployment benefits last week, a sign that the job market is recovering. The four-week average for applications, a figure closely watched by financial analysts, fell to its lowest level in more than two and a half years. The Commerce Department said sales of new homes fell significantly in January, another sign that the housing industry is still struggling

Several companies rose after announcing better than expected earnings.

Priceline.com Inc. jumped 6.7 percent after the online travel service reported a 73 percent surge in fourth-quarter earnings and raised its income forecast for the current quarter. Target Corp. rose 2.4 percent after the retailer reported an 11 percent gain in profit. H&R Block Inc. rose 6 percent after the tax preparation company said it expected to report near break-even earnings in its fiscal third quarter.

Bond prices rose, pushing their yields lower. The yield on the 10-year Treasury note fell to 3.42 percent from 3.49 percent late Wednesday.

© 2011 The Associated Press. All rights reserved.

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