U.S. Stocks Drop on Higher Energy Prices, Chipmaker Downgra

U.S. stocks slid, erasing last week's advance, as escalating violence in Libya sent oil higher and chipmakers tumbled after Wells Fargo & Co. reduced its recommendation on the industry.

Intel Corp., the world's largest semiconductor company, slid 1.9 percent following Wells Fargo's downgrade, while Micron Technology Inc. lost 6 percent. JDS Uniphase Corp. fell the most in the Standard & Poor's 500 Index after competitor Ciena Corp.'s revenue forecast missed analysts' estimates. Alcoa Inc., Walt Disney Co. and Boeing Co. lost at least 2.2 percent to lead declines in the Dow Jones Industrial Average.

The S&P 500 tumbled 0.8 percent to 1,310.92 at 3:17 p.m. in New York after climbing as much as 0.5 percent earlier and advancing 0.1 percent last week. The Dow declined 70.27 points, or 0.6 percent, to 12,099.61. Oil for April delivery surged 0.9 percent at $105.33 a barrel.

"Geopolitical concerns and the price of oil are the major things driving the market," said John Kattar, chief investment officer at Eastern Investment Advisors in Boston, which manages $1.7 billion. "It's very volatile with the news flow being so dominated by the Middle East."

The S&P 500 fell 0.7 percent on March 4, trimming a weekly advance, as the surge in oil fueled concern consumer spending may slow as Labor Department data showed average hourly earnings were unchanged last month.