* Oil prices fall to a seven-month low
* Chipotle falls after warning on costs
* Indexes down: Dow 0.16 pct, S&P 0.49 pct, Nasdaq 0.59 pct
(Updates to early afternoon)
By Tanya AgrawalJune 20 (Reuters) - U.S. stocks extended their losses in
early afternoon trading on Tuesday, slipping from record levels,
as a sharp drop in oil prices squeezed energy stocks and a
rebound in technology shares faded out.
Oil prices nosedived to seven-month lows after news of
increases in supply by several key producers, a trend that has
undermined attempts by OPEC and other producers to support the
market through reduced output. [O/R]
Oil majors Chevron <CVX.N> and Exxon <XOM.N> were down about
1.5 percent and were among the biggest drags on the Dow and the
The S&P energy sector's <.SPNY> 1.7 percent fall led the
Both oil benchmarks - U.S. crude and Brent - are down more
than 15 percent since late May, raising concerns that prices
could fall further in the near-term.
"Oil prices are now approaching bear market territory and
that, psychologically, has a big impact on Wall Street," said
Adam Sarhan, chief executive officer at 50 Park Investments in
"If oil prices collapse, the message the oil market is
sending is that demand is drying up and global economic growth
At 12:49 p.m. ET (1649 GMT), the Dow Jones Industrial
Average <.DJI> was down 33.44 points, or 0.16 percent, at
21,495.55, the S&P 500 <.SPX> was down 12.05 points, or 0.49
percent, at 2,441.41.
The Nasdaq Composite <.IXIC> was down 36.55 points, or 0.59
percent, at 6,202.46.
A recovery in technology stocks also appeared to have lost
momentum, adding to the overall weakness.
"Investors are hunting for value and while the 'buy-the-dip'
crowd showed up when tech stocks fell, we are seeing a
mini-rotation among sectors where underperforming sectors such
as healthcare and biotech stocks are being snapped up right
now," said Sarhan.
The health index <.SPXHC> was the only gainer among the 11
major S&P sectors, with a rise of 0.62 percent.
The S&P technology sector <.SPLRCT> was down 0.5 percent,
with big tech names such as Apple <AAPL.O> and Microsoft
<MSFT.O> dragging on the S&P and Nasdaq.
The sector had posted two straight weeks of losses on
concerns regarding valuation and a move into defensive sectors
in a rising interest rate environment.
On Tuesday, Boston Fed President Eric Rosengren said that
the era of low interest rates in the United States and elsewhere
poses financial stability risks and that central bankers must
factor such concerns into their decision-making. [nN9N1IS003]
Among stocks, Lennar <LEN.N> rose 1.8 percent to $53.66
after the No. 2 U.S. homebuilder reported a higher-than-expected
quarterly profit. D.R. Horton <DHI.N> was up 1.3 percent, while
Pultegroup <PHM.N> rose 0.7 percent. [nL3N1JH3HY]
Chipotle <CMG.N> fell 6.3 percent to $429.86 after the
burrito chain said its operating costs in the second quarter
will be slightly higher than the first quarter.
Declining issues outnumbered advancers on the NYSE by 2,095
to 736. On the Nasdaq, 1,948 issues fell and 862 advanced.
(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)
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Keywords: USA STOCKS/ (UPDATE 4)