(Adds close of U.S. markets, changes byline)
* Crude oil prices scale a new peak near $130 a barrel
* Surging oil, producer price data fuels inflation worries
* U.S. bank shares fall after analyst's gloomy forecast
By Herbert Lash
NEW YORK, May 20 (Reuters) - Global stocks tumbled on
Tuesday as crude oil approached $130 a barrel amid deepening
worries over tight global stockpiles and as rising wholesale
prices in Europe and the United States stoked inflation fears.
U.S. stock indexes fell more than 1 percent, with the Dow
industrials slumping 200 points as slack earnings from leading
retailers suggested weakening consumer spending.
The Dow posted its biggest single-day percentage drop since
April 11, while European shares posted their worst one-day drop
in two months. Energy shares Exxon Mobil and Chevorn were the
only two gainers among the 30 components of the Dow, with
Chevron hitting a lifetime high.
Oil rose to a record high of $129.60 <CLc1> a barrel in New
York amid signals from OPEC that no additional supplies are
forthcoming and as investment banks and influential U.S. oil
investor T. Boone Pickens forecast higher prices. Pickens said
he sees oil prices reaching $150 a barrel this year.
"There's a feeling that some of these forecasts of $150 oil
might be right," said Peter Beutel, president of Cameron
Hanover. "So why not buy it now, rather than later?"
Oil prices have risen sixfold since 2002 amid surging
demand in China and other developing economies.
Underlying U.S. producer prices in April posted their
biggest annual gain since December 1991. The rise in oil,
combined with the producer price reports, suggested that
soaring commodities prices would become embedded in corporate
costs.
U.S. government bond prices gained as investors bet the
economy would crack when companies are forced to settle for
slimmer profit margins or to pass on their rising costs to
increasingly hard-pressed consumers.
"The big question in the market is how consumer spending
holds up in the midst of high energy prices and all of the
problems that we're having," said Frank Lesh, futures analyst
and broker at FuturePath Trading LLC in Chicago. "New highs
again for crude oil add to this fear."
The Dow Jones industrial average <> fell 199.48 points,
or 1.53 percent, at 12,828.68. The Standard & Poor's 500 Index
<.SPX> fell 13.21 points, or 0.93 percent, at 1,413.42. The
Nasdaq Composite Index <> fell 23.83 points, or 0.95
percent, at 2,492.26.
Slack earnings from discount retailer Target Corp <TGT.N>
and home improvement chain Home Depot Inc <HD.N> suggested
weakening consumer spending. Shares of Home Depot fell 5.2
percent to $27.37, while shares of Target lost 1.2 percent to
$54.29
Shares of banks, including JPMorgan Chase & Co <JPM.N>,
also dropped after an influential analyst warned that the
credit crisis was far from over and could extend beyond next
year.
Meredith Whitney, a U.S. banking analyst at Oppenheimer &
Co, said the credit crisis is likely to extend well into next
year and beyond, resulting in three years of multibillion
dollar revenue declines for banks. For details, see
[].
JPMorgan shares lost 5.0 percent to $43.70.
Shares of Exxon Mobil <XOM.N> gained 0.2 percent to $94.56,
and Chevron <CVX.N> rose 0.9 percent to $103.09, after earlier
hitting a lifetime high of $103.25
In Europe, mining stocks and banks were the biggest
decliners. The FTSEurofirst 300 index <> of top European
shares fell 2 percent to close at 1,350.54 points, making it
the worst one-day fall since March 17, when the index hit a
two-and-a-half-year year low.
Mining stock losses were led by BHP Billiton <BLT.L> and
Rio Tinto <RIO.L>, which fell 6.9 and 7.9 percent,
respectively. These declines come just days after shares in
both companies hit record highs.
Among banks HSBC <HSBA.L> lost 2.3 percent, Banco Santander
<SAN.MC> fell 1.4 percent, BNP Paribas <BNPP.PA> fell 1.8
percent and Credit Suisse <CSGN.VX> lost 2.5 percent.
U.S. Treasury debt prices rose as the record high oil
prices heightened prospects for a slower economy and falling
equities pushed investors into safe-haven government bonds.
"If the rise in energy prices is perceived as a negative
for the economy, then it can be viewed as a positive for
Treasuries," said William Sullivan, chief economist at JVB
Financial Group in Boca Raton, Florida.
U.S. crude oil futures <CLc1> settled up $2.02 to $129.07 a
barrel after hitting a high of $129.60 during the session.
London Brent crude <LCOc1> rose $2.78 to $127.84 a barrel.
The dollar fell as talk of higher euro zone interest rates
prompted investors to increase exposure to the euro, although
losses were capped by inflation data that muddied the U.S.
interest rate outlook.
The dollar fell against major currencies, with the U.S.
Dollar Index <.DXY> off 0.85 percent at 72.407.
The euro <EUR=> rose 0.94 percent at $1.5663, and against
the yen, the dollar <JPY=> fell 0.67 percent at 103.64.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
12/32 to yield 3.7859 percent. The 2-year U.S. Treasury note
<US2YT=RR> was up 4/32, with the yield at 2.3232 percent. The
30-year U.S. Treasury bond <US30YT=RR> was up 21/32, with the
yield at 4.5373 percent.
Gold surged above $920 an ounce, ending near its highest
level in almost a month as record-high oil prices fueled fears
of accelerating inflation.
Spot gold <XAU=> hit a high of $923.40 an ounce, its
highest level since April 22. It last traded at $920.20/921.40
in New York.
"Obviously the worries about inflation continue and are
getting worse," said Daniel Hynes, metals analyst at Merrill
Lynch.
Tokyo's Nikkei stock average fared little better, slipping
0.77 percent, or 109.52 points, to finish at 14,160.09.
(Editing by Leslie Adler)
