Business

Stocks slip in morning trading; oil prices surge

Earnings ForecastsAir Transportation IndustryPetroleum IndustryCommodity MarketsEnergy SavingDelta Air LinesDiamond Offshore Drilling Incorporated

Stocks edged lower Thursday morning after a report showed that retail sales rose less than forecast in May while the price of oil surged amid renewed violence in Iraq.

The Dow Jones industrial average fell 45 points, or 0.3%, to 16,798 as of 11:14 a.m. Eastern time. The Standard & Poor's 500 was down five points, or 0.3%, to 1,938. The Nasdaq slipped 12 points, or 0.3%, to 4,319.

U.S. retail sales rose for a fourth straight month in May, but the growth was slightly below economists' forecasts. The Commerce Department said consumer spending rose 0.3% last month, helped by a surge in auto demand, but shy of the 0.4% increase that economists expected.

The Labor Department said that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.

Lululemon Athletica fell $6.82, or 15%, to $37.47 after reporting first-quarter profit tumbled 60 percent, stung by a one-time tax adjustment. The Canadian yoga-clothing company also lowered its full-year earnings forecast.

Restoration Hardware jumped $10.06, or 14%, to $80.41 after the furniture and housewares company reported stronger-than-expected results in its fiscal first quarter and raised its outlook for the year, topping Wall Street's prediction.

Energy stocks rose broadly, and were the only sector in the S&P 500 moving higher in late morning trading, as fears rose that insurgent victories in Iraq could disrupt global oil supplies. The price of oil by $1.46, or 1.4%, to $105.86.

Diamond Offshore Drilling rose $1.31, or 2.8%, to $48.19. Exxon Mobil climbed 64 cents, or 0.8%, to $102.60. It was the biggest gainer in the Dow.

Higher oil prices helped push down airline stocks sharply. Delta Air Lines fell $2.13, or 5%, to $38.58. Southwest Airlines dropped $1.19, or 4.4%, to $25.75.

The yield on the 10-year Treasury note slipped to 2.62% from 2.64% on Wednesday.

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