Stocks tumbled Wednesday as oil prices climbed to a new high on fears of refining shortages, causing investors to look past a report showing strong growth in the service sector of the economy. The Dow Jones industrial average dropped more than 101 points.
Oil closed above $61 a barrel as investors worried that Tropical Storm Cindy would hurt production in the Gulf of Mexico and refinery capacity along the coast. Reports of power outages at two Valero Energy refineries heightened investors' fears.
A positive service sector report failed to stem losses. The Institute for Supply Management's services index for June was 62.2, higher than the 58.9 economists had expected and better than May's 58.5.
The Dow fell 101.12, or 1 percent, to 10,270.68. The Standard & Poor's 500-stock index dropped 10.05, or 0.8 percent, to 1194.94, and the Nasdaq composite index declined 10.10, or 0.5 percent, to 2068.65.
Valero Energy dropped $1.46, to $83.50, after the company said the outages would reduce oil-refining capacity slightly. Global demand for oil and distillates have threatened to overtake supply, and any reduction in refining capacity is seen as pressure on crude futures.
PacifiCare Health Systems surged $4.41, to $77.09, after the company confirmed it would be acquired by UnitedHealth Group in a $8.1 billion cash-and-stock deal. It was the second-biggest acquisition ever recorded in the health care sector. UnitedHealth gained 27 cents, to $53.50.
Amgen increased $1.09, to $63.60. The company said a study showed one of the company's drugs for cancer and kidney disease may also help patients with bone marrow disorders.
Exxon Mobil slid $1.03, to $59.11, as an index of energy shares lost 1.8 percent, for the biggest decline among 10 groups in the S&P 500. Chevron fell $1.40, to $57.16.
Zions Bancorp of Utah fell $4.69, to $68.67, after it announced it would buy Texas bank Amegy Bancorp for $1.7 billion in cash and stock, or $23.32 per share. Amegy fell $1.05, to $21.93.
New York Stock Exchange composite index fell 37.80, to 7251.87.
American Stock Exchange index rose 1.10, to 1549.28.
Russell 2000 index of smaller-company stocks fell 4.96, to 648.27.
NYSE: 1.89 billion shares, up from 1.77 billion on Tuesday. Decliners outnumbered advancers 4 to 3.
Nasdaq: 1.58 billion shares, up from 1.43 billion. Decliners outnumbered advancers 11 to 8.
Crude oil for August delivery: $61.28, up $1.69.
Gold for current delivery: $423.50 a troy ounce, up from $422.90 on Tuesday.