NEW YORK (Reuters) – Rising oil prices and tumbling bank shares dragged Wall Street lower on Friday, with stocks surrendering the previous session’s hefty gains.

Brent crude prices hovered near $116 a barrel as Libyan security forces began a violent crackdown on protesters in Tripoli and clashed with rebels near a major oil terminal.

Data earlier in the week had raised expectations about Friday’s employment report, lifting stocks to their biggest gains in three months on Thursday. But after Friday’s report showed February job gains roughly in line with expectations, investors quickly turned their focus to rising oil prices and Libyan unrest.

“The (market) battle is: has the economy turned in a permanent way, or are higher oil prices going to slow everything down,” said Bernie McGinn, president at McGinn Investment Management in Alexandria, Virginia.

The revolts in North Africa and the Middle East that have boosted crude prices, coupled with subdued client activity, could pressure first-quarter earnings of large U.S. banks, according to Bank of America Merrill Lynch. The brokerage downgraded shares of Citigroup Inc (C.N) and Goldman Sachs Group Inc (GS.N) to “neutral” from “buy.

Goldman fell 2 percent to $161.18 and Citi dropped 3.2 percent to $4.53. The KBW bank index (.BKX) lost 1.9 percent.

The Dow Jones industrial average (.DJI) lost 147.66 points, or 1.20 percent, to 12,110.54. The Standard & Poor’s 500 Index (.SPX) fell 15.40 points, or 1.16 percent, to 1,315.57. The Nasdaq Composite Index (.IXIC) dropped 24.70 points, or 0.88 percent, to 2,774.04.

Volume was light, with about 4.15 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq so far in the session.

U.S. payrolls rose by 192,000 in February, slightly above the 185,000 gain expected by a Reuters poll, and the unemployment rate unexpectedly dipped to 8.9 percent from 9 percent.

“Earnings and hours are not increasing, and people’s paychecks are not really increasing,” said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. “Without more cash in your pocket, there’s no way you can spend it.”

Among consumer-related shares, the homebuilding sector was hurt the most. The PHLX housing index (.HGX) fell 1.8 percent with Weyerhaeuser (WY.N) down 2.5 percent to $23.51 and KB Home (KBH.N), Ryland Group (RYL.N) and MDC Holdings (MDC.N) all down about 3 percent.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)

NEW YORK (Reuters) – Stocks extended losses and hit session lows on Friday as oil prices rose to their highest intraday price in nearly 2-1/2 years on increased violence in Libya.

The Dow Jones industrial average (.DJI) fell 56.42 points, or 0.46 percent, at 12,201.78. The Standard & Poor’s 500 Index (.SPX) lost 7.92 points, or 0.60 percent, at 1,323.05. The Nasdaq Composite Index (.IXIC) dropped 12.05 points, or 0.43 percent, at 2,786.69.

(Reporting by Chuck Mikolajczak)

NEW YORK (Reuters) – U.S. stocks dropped more than 1 percent on Tuesday as rising tensions on the Korean peninsula added to worries over how euro zone debt woes could affect domestic markets.

North Korea fired scores of artillery shells at a South Korean island, killing two soldiers and setting houses ablaze, and South Korea returned fire. The iShares MSCI South Korea Index Fund (EWY.P) fell 5.3 percent.

Global stock markets tumbled while the dollar climbed as the geopolitical tensions and worries over Ireland’s debt problems drove investors to the relative safety of the U.S. currency. Crude oil futures sank 1.4 percent.

“The prospect of armed conflict in Asia along with the debt problems on Europe are creating a lot of negative sentiment,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

The Dow Jones industrial average (.DJI) dropped 138.88 points, or 1.24 percent, at 11,039.70. The Standard & Poor’s 500 Index (.SPX) was down 15.94 points, or 1.33 percent, at 1,181.90. The Nasdaq Composite Index (.IXIC) slid 32.63 points, or 1.29 percent, at 2,499.39.

In the latest economic data, the U.S. economy grew faster than previously estimated in the third quarter, but still not enough to address stubbornly high unemployment. Also, existing home sales fell by more than forecast in October after two months of gains.

“The GDP data shows that the economy is certainly still growling, but the numbers weren’t big enough to disrupt the market’s focus on overseas events.” McCain said.

On the upside, Dow component Hewlett-Packard Co (HPQ.N) rose 1.2 percent to $43.75 a day after it raised its outlook and posted stronger-than-expected quarterly profit.

The European Union urged Ireland to adopt an austerity budget on time to unlock promised EU/IMF funding, while Irish Prime Minister Brian Cowen rebuffed calls for a snap election and insisted the budget would go ahead as planned on December 7.

European stocks fell nearly 1 percent to a 3-week low, led by declining banking shares. U.S.-listed shares of Bank of Ireland (IRE.N) sank 23 percent to $1.71, while HSBC Holding (HBC.N) fell 1.8 percent to $51.36.

Among South Korean companies, steelmaker Posco (PKX.N) sank 4.5 percent to $96.52.

Hormel Foods Corp (HRL.N) rose 3.4 percent to $49.54 after it reported higher-than-expected profit, while Campbell Soup Co (CPB.N) lost 0.7 percent to $34.57 after its earnings missed expectations.

Minutes of the Federal Reserve’s November 3 Open Market Committee meeting that included its decision for more quantitative easing will be released at 2 p.m. EST (1900 GMT).

(Editing by Jeffrey Benkoe)

LONDON (Reuters) – Stock index futures pointed to a higher open for European shares on Thursday after the Federal Reserve launched a fresh effort to support a struggling U.S. economy, committing to buy $600 billion in government bonds.

At 3:04 a.m. ET, STOXX Europe 50 futures were up 1.1 percent, Germany’s DAX futures were up 0.8 percent and France’s CAC-40 futures were up 1 percent.

The U.S. central bank said it would buy about $75 billion in longer-term Treasury bonds per month through the end of June 2011 and could adjust purchases depending on the strength of the recovery.

(Reporting by Brian Gorman)

NEW YORK – Stocks were narrowly mixed in midday trading Tuesday after a rise in consumer confidence offset disappointing news on home prices and earnings.

The Dow Jones industrial average fell 3 points, while broader indexes were mixed. Stocks started the day lower after weak results from Texas Instruments Inc., U.S. Steel Corp. and Bristol-Myers Squibb Co. A better report about consumer confidence in October helped stocks pare their losses in midday trading.

“The consumer confidence numbers were encouraging,” said Bernie McSherry, vice president of strategic initiatives at Cuttone and Co. It’s a sign shoppers “may be reaching into their wallets heading into the holiday shopping season.”

Ford Motor Co. and Coach Inc. were among the few bright spots in the big batch of earnings reports released Tuesday.

Drugmaker Bristol-Myers Squibb reported a better-than-expected profit, but revenue fell short of forecasts. Sales were hurt by the health care overhaul bill passed earlier this year.

U.S. Steel surprised analysts by reporting a quarterly loss, while chipmaker Texas Instruments said it expects sales to moderate during the fourth quarter because of low consumer demand.

Traders were also moving out of riskier assets as the dollar strengthened. A stronger dollar makes stocks and commodities more expensive because they are priced in dollars. The dollar rose against Japan’s yen and the euro Tuesday. Gold fell slightly.

Home prices slid in August, renewing concerns about the health of the housing market. The Standard & Poor’s/Case-Shiller home price index fell 0.2 percent in August. Fifteen of the 20 cities measured in the index saw price declines. The housing market remains very weak and any last lift sales and prices got from a now-expired tax credit appear to be gone.

The Dow fell 2.84, or less than 0.1 percent, to 11,161.21.

The Dow had been hovering near its highest trading levels of the year over the past few days, but has been unable to maintain upward momentum. Twice in the past three days the Dow has briefly traded above its highest closing level of the year, only to pull back before the end of the day.

The Standard & Poor’s 500 index fell 0.58, or 0.1 percent, to 1,185.04, while the Nasdaq composite index rose 5.57, or 0.2 percent, to 2,496.42.

“It’s a meandering market,” said Kimberly Foss, president at Empyrion Wealth Management. She said it’s likely to remain that way until after the midterm elections and Federal Reserve meeting next week.

Traders are waiting to see whether Republicans take back Congress and how much the Fed will spend buying Treasury bonds.

Disappointing news from European companies like banking giant UBS, wind turbine maker Vestas and steel maker ArcelorMittal drove stocks lower overseas. Britain’s FTSE 100 fell 0.8 percent and France’s CAC-40 fell 0.5 percent. Germany’s DAX fell 0.4 percent.

Bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.62 percent from 2.56 percent late Monday.

Shares of Bristol-Myers Squibb fell 27 cents to $26.89, while Texas Instruments dropped 27 cents to $28.71. U.S. Steel tumbled $1.66, or 3.9 percent, to $40.61.

UBS shares trading in the U.S. slid 93 cents, or 5.2 percent, to $16.99.

Ford rose 15 cents to $14.30 after it beat expectations and announced plans to accelerate debt repayments. Coach jumped $4.77, or 10.7 percent, to $49.25 after its results indicated affluent shoppers are returning to stores.

Gold fell $3.70 to $1,335.20 an ounce.

NEW YORK – Stock futures slipped Tuesday after a mixed batch of earnings in both the U.S. and Europe. A stronger dollar also tempered any excitement in the market.

Strong results from DuPont were not enough to offset some concerns about Ford Motor Co.’s results and disappointing news from European companies like banking giant UBS, wind turbine maker Vestas and steel maker ArcelorMittal. Major European indexes all fell Tuesday.

Chemical maker DuPont’s results easily beat forecasts and it raised its outlook for the remainder of the year due to growing sales in emerging markets.

Ford’s results beat forecasts as it was able to grab a bigger share of U.S. auto sales. But its shares fell after it said it launched an offer to swap debt for common stock, which will dilute current shareholders’ stake in the automaker.

The drugmaker Bristol-Myers Squibb Co. reported a better-than-expected profit, but revenue fell short of forecasts. Sales were hurt by the health care overhaul bill passed earlier this year.

In recent days, strong corporate earnings have been somewhat muted by fluctuations in the dollar. A stronger dollar makes stocks, gold and oil more expensive because they are priced in the currency. The dollar rose against Japan’s yen and the euro Tuesday. Gold and oil prices both fell slightly.

Traders that focus on economic reports will likely turn to a report on consumer confidence Tuesday. The Conference Board’s consumer confidence index likely rose slightly this month, but still remains well below levels considered necessary for a healthy economy.

Ahead of the opening bell, Dow Jones industrial average futures fell 22, or 0.2 percent, to 11,093. Standard & Poor’s 500 index futures fell 3.10, or 0.3 percent, to 1,179.70, while Nasdaq 100 index futures fell 4.00, or 0.2 percent, to 2,104.50.

The Dow has been hovering near its highest trading levels of the year over the past few days, but has been unable to maintain its upward momentum. Twice in the past three days the Dow has briefly traded above its highest closing level of the year, only to pullback before the end of the day.

Gold fell $7.20 to $1,331.70 an ounce. Benchmark crude oil fell 30 cents to $82.22 a barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Britain’s FTSE 100 fell 0.9 percent and France’s CAC-40 fell 0.8 percent. Germany’s DAX fell 0.3 percent.

Bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.59 percent from 2.56 percent late Monday.

SINGAPORE (Reuters) – Asian stocks fell on Wednesday, with Japan’s big exporters among the heaviest losers as a rise in the yen to a new 15-year high threatens to erode their overseas earnings.

The euro was on the defensive after renewed fears about the euro zone banking system drove it to life lows against the Swiss franc and Australian dollar, hitting financial stocks and dragging equity markets in Europe and the United States lower.

“It’s the same old ugly contest — which currency is the least unattractive,” said a dealer at a local bank in Sydney.

Japan’s Nikkei (.N225) fell 2 percent, with the electric equipment, retail trade and motor vehicle sectors the biggest drags on the index.

Exporters Honda Motor (7267.T) fell 2.9 percent and chip-tester maker Advantest (6857.T) lost 4.2 percent as the yen traded at 83.66, just off a 15-year high hit on Tuesday of 83.51.

“The dollar falling below 84 yen has completely neutralized any positive impetus from the jump in machinery orders,” said Masayoshi Okamoto, head of dealing at Jujiya Securities.

MSCI’s broadest index of Asian shares outside Japan (.MIAPJ0000PUS) eased 0.4 percent.

EURO WORRIES

Worries about Europe’s banks resurfaced on Tuesday, when the Wall Street Journal reported that some major lenders had understated holdings in potentially risky government debt during “stress tests” designed to test their ability to weather crises.

Ireland added to the jittery mood, extending its guarantees for short-term bank liabilities amid fears over the escalating cost of bailing out nationalized lender Anglo Irish (ANGIB.UL).

The euro was pinned at $1.2690, having dived from $1.2876 on Tuesday and a three-week high of $1.2920 the day before.

Traders were now looking for a test of support around $1.2625, though they were not keen to go long of the U.S. currency either given concerns about the country’s faltering economic recovery.

The dollar hit a fresh 15-year trough of 83.51 yen before talk of “semi-official” bids and option protection at 83.50 helped it edge up to 83.74.

Analysts at BNY Mellon, who track investor flows in and out of currencies, reported net outflows from the euro and the U.S. dollar.

Wall Street stocks were almost as unpopular as sovereign bonds from the hard pressed euro zone “periphery” such as Greece and Ireland.

“Investors clearly remain concerned about the sovereign debt burden of a number of peripheral euro zone nations and, as a result, are still keen to reduce their exposure to the euro as a result,” BNY Mellon said in a note.

“On the other hand, they also have little faith in the outlook for the U.S. economy and are reducing their exposure steadily.”

A broad retreat from riskier assets boosted gold and dented oil, with spot gold rising more than $3.50 to $1,256.60 while U.S. crude eased 0.5 percent to below $74 a barrel.

LONDON (AFP) – World oil prices rallied on Thursday, as rising European stock markets and a weak dollar led traders to shrug off a massive increase in US crude reserves, analysts said.

New York’s main contract, light sweet crude for October delivery, added 87 cents to 73.39 dollars a barrel.

Brent North Sea crude for October won 1.05 dollars to 74.54 dollars a barrel in midday London trade.

“Crude oil prices extended gains and surged above 73 dollars per barrel in a correction higher, supported by a softer US dollar and further gains across the global equity markets,” said Sucden analyst Myrto Sokou.

Stock markets rebounded on Thursday following a run of losses as traders digested a brighter outlook for the global economy following the release of positive economic data and earnings.

In foreign exchange trade, the dollar eased to 84.53 yen from 84.59 late in New York on Wednesday. The euro rose to 1.2707 dollars from 1.2655.

A weaker greenback entices buyers using rival currencies to snap up dollar-denominated crude because it becomes cheaper to buy.

Crude futures had also gained ground on Wednesday, despite dismal US economic data and a spectacular jump in American crude reserves that signaled weaker demand in the United States — the world’s biggest oil-consuming nation.

The US government’s Department of Energy (DoE) said crude stockpiles surged 4.1 million barrels last week. That confounded market expectations for a 200,000-barrel drop, according to analysts polled by Dow Jones Newswires.

Gasoline (petrol) stockpiles rose 2.3 million barrels, against forecasts for a 500,000-barrel decline.

Distillates, including diesel and heating fuel, gained 1.8 million barrels when analysts had pencilled in a rise of 900,000 barrels.

Markets were also rattled on Wednesday after US data showed that new home sales in July plunged by 12.4 percent from a month earlier to the lowest level since 1963, shattering analysts’ expectations for a modest rise.

NEW YORK – Investors cast aside worries of another recession last week and bought stocks by the bucketful. This week brings hard evidence of whether they were right.

A new earnings reporting season kicks off Monday with Alcoa Inc., followed by dozens of other companies over the next few days. A question on everyone’s lips: Will these second-quarter reports show that companies are feeling better about the future, too?

“We’ll find out soon enough what the reality is,” says Howard Silverblatt, a senior analyst at Standard & Poor’s.

After dumping stocks since late April, investors last week drove the Dow Jones industrial average up 5.3 percent, its best weekly performance in a year. Some analysts say stocks had simply gotten too cheap for investors to resist. Others point to an International Monetary Fund report that the world economy could grow faster than projected. That took some of the fear out of the market.

“The economy is running on two cylinders but the risk of a double-dip recession” has fallen, says Peter Buchanan, senior economist at CIBC World Markets. “The market could go higher.”

Certainly, that is the view of professional stock pickers. When investors were selling stocks week after week, eventually driving shares down 13.6 percent from their April peak, Wall Street analysts never lost faith in the future.

They’re projecting that second-quarter operating earnings of S&P 500 companies rose 42 percent, according to S&P’s Silverblatt. They also think operating earnings in the current quarter, which ends Sept. 30, will jump 31 percent over a year ago. And in the following three months, they’ll jump again — 28 percent.

Then it’s up, up and away.

By the end of 2011, S&P 500 index companies should be earning more than they did at the peak of the credit bubble in 2006 — if you believe the professional prognosticators.

With hurdles so high, all eyes are on profit reports now. Analysts say they’ll be paying at least as much attention to what executives say about future earnings as to what’s been generated so far. Those forecasts will tell investors whether last week’s burst of optimism was justified.

Some big reports to watch besides Alcoa‘s: Intel Corp. on Tuesday, Google Inc. and JPMorgan Chase & Co. on Thursday and Bank of America Corp. on Friday.

Shannon Puls, who runs researcher EarningsWhispers.com in Jackson, Mo., says that even if earnings reports are upbeat, investors should think twice before jumping into the market. His reason: Wall Street analysts are saying to do it with both feet.

The problem, Puls says, is that analysts shy away from “gutsy calls” because if they’re wrong, clients could lose money and analysts will lose their jobs. So, Puls says, they predict in packs, often proving a “contrarian indicator.”

In other words, don’t do what they say. Do the opposite.

Puls says that analysts are now more optimistic than ever, and that means stocks could fall. He ranks analyst recommendations on more than 3,000 companies on a sliding scale, with 1 representing a strong “buy” and 5 a strong “sell.” The average call now: 2.07. That’s the lowest, or most bullish, in the nine years he’s been tallying the numbers.

Analyst ratings “have got to come down,” Puls says. “And that’s going to be bearish on stocks.”

Another reason for investors to exercise caution is all the corporate cash lying around in banks vaults, earning little. Companies worried about the future hoard money, just as people do. In March, cash at S&P 500 companies hit a record $837 billion. That’s equivalent to 1 1/2 years of their operating earnings.

The cash hoard of as June 30 won’t be known until mid-August, and it’s anyone’s guess what the level will be. But S&P’s Silverblatt is willing to predict this: It’ll hit a new record.