* Oil futures rise about $3 a barrel
* Financial shares tumble on credit concerns
* Liz Claiborne, Macy's outlooks disappoint
* Dow down 0.9 pct, S&P down 0.3 pct, Nasdaq down 0.08 pct
(Updates to close)
By Kristina Cooke
NEW YORK, Aug 13 (Reuters) - U.S. stocks fell on
Wednesday, as persistent concerns about the credit crisis hurt
bank shares while a rebound in oil prices and weak outlooks at
some retailers raised anxieties about consumer spending.
Caterpillar, a bellwether for the U.S. economy, was among
the top drags on the Dow industrials after fellow manufacturer
Deere & Co <DE.N> posted disappointing earnings. Deere's
results added to evidence that the malaise from the housing
slump was seeping into other areas of the economy.
Financial stocks fell for a second day on fears of more
credit losses. The Texas securities commissioner said
regulators were close to reaching a settlement that would
force some banks to repurchase billions of dollars of the
now-illiquid auction-rate securities at face value.
Adding to the negative view of the financial sector, four
of Wall Street's biggest investment banks were downgraded by
an analyst at Merrill Lynch & Co, who said the global credit
crisis has worsened and may prompt investors to try to avoid
the carnage.
Retailers fell, after women's apparel retailer Liz
Claiborne Inc <LIZ.N> cut its 2008 profit forecast, citing
economic concerns, and Macy's Inc cut its fiscal-year earnings
forecast, warning that cutbacks in consumer spending could
push sales down further at its stores.
"The backdrop is quite dismal. Now that the tax rebate
checks have been spent, the question is where the next
infusion of cash into the ecnoomy is going to come from," said
Peter Kenny, managing director at Knight Equity Markets in
Jersey City, New Jersey.
"Financials are lower based on what appears to be an
announcement coming about a settlement on auction-rate
securities, which is putting more negative pressure on that
sector."
The Dow Jones industrial average <> fell 109.51 points,
or 0.94 percent, to 11,532.96, while the Standard & Poor's 500
Index <.SPX> slipped 3.76 points, or 0.29 percent, to
1,285.83. The Nasdaq Composite Index <> was down 1.99
points, or 0.08 percent, at 2,428.62.
U.S. crude oil futures <CLc1> jumped $3.44 to $116.45 a
barrel after weekly government data showed an unexpectedly
large decline in crude oils stocks.
Further fueling the unease, U.S. retail sales edged down
in July on a big drop at auto dealers, the government said,
suggesting consumers were straining to keep spending up amid
rising prices.
The stock of apparel retailer Liz Claiborne fell 11.6
percent to $13.18.
Macy's, however, which spent most of the session in the
red, recovered late in the day to end at $20.66, up 1.9
percent. Earlier, it had fallen almost $1 from Tuesday's
close.
Investors sold off shares of major banks and other
financial firms, a day after JPMorgan Chase & Co <JPM.N> said
it had racked up an additional $1.5 billion in write-downs
stemming from soured mortgage-related investments.
Merrill Lynch downgraded Citigroup Inc <C.N>, Goldman
Sachs Group Inc <GS.N> and Lehman Brothers Holdings Inc
<LEH.N> to "underperform" and Morgan Stanley <MS.N> to
"neutral". The Merrill analyst also cut his third-quarter and
2008 earnings forecasts and his price targets for those banks,
as well as for JPMorgan Chase & Co <JPM.N>.
Citigroup shares fell 3.9 percent to $17.81. JPMorgan
shares dropped 2.7 percent to $36.91. Lehman Brothers shares
fell 4 percent to $15.57, while Goldman Sachs shares shed 1.4
percent to $164.90.
Shares of Deere dropped 3.2 percent to $67.10. Caterpillar
Inc <CAT.N> fell 2.8 percent to $69.83.
Another standout decliner was General Motors <GM.N>, down
7.6 percent at $10.26, after credit rating agency Moody's
Investors Service cut its ratings on the automaker deeper into
junk.
The Nasdaq outperformed the other indexes, helped by Apple
Inc <AAPL.O>, whose shares rose following news it will expand
sales of its iPhone in an alliance with top U.S. electronics
chain Best Buy <BBY.N>. Apple shares shot up 1.5 percent to
$179.30. A 10.8 percent jump in the shares of graphics
chipmaker Nvidia Corp <NVDA.O>, which late on Tuesday
announced a $1 billion stock-buyback program, also helped the
Nasdaq. Nvidia shares closed at $12.26.
Apart from retail sales, economic reports on Wednesday
also showed a stronger-than-expected rise in July import
prices.
U.S. crude oil for September delivery <CLc1> gained $2.99
to settle at $116.00 a barrel after the latest U.S. inventory
report showed declines in oil and gasoline stockpiles.
Trading volume was low on the New York Stock Exchange,
with about 1.21 billion shares changing hands, below last
year's estimated daily average of roughly 1.90 billion, while
on Nasdaq, about 2.05 billion shares traded, also short of
last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones on the NYSE by
9 to 7, while on the Nasdaq, advancers beat decliners by about
5 to 4.
(Editing by Jan Paschal)
