Libya worries push US stocks down a 2nd day

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Airline shares were hammered for a second day over the prospect of higher fuel costs, while oil companies gained for the same reason.

The Dow Jones Industrial Average lost 107.01 points, (0.88 per cent), to 12105.78, after trading down nearly 150 points during the session.

The broader S&P 500 gave up 8.04 points (0.61 per cent), while the tech-focused Nasdaq lost 33.43 (1.21 per cent) at 2,722.99.

"Increasingly violent political protests in Libya amplified fears of contagion in the Middle East," said Andrea Kramer of Schaeffer's Investment Research.

"What's more, the geopolitical turmoil in the oil-saturated region heightened concerns about significant supply disruptions."

Most airline shares lost six to seven percent on the prospect of higher fuel costs, after similar losses Tuesday.

AMR Corp, parent of American Airlines, fell 6.6 per cent; United Continental lost 6.8 per cent and US Airways 7.4 per cent.

Delta, to the contrary, picked up 2.61 per cent after a favorable ruling in a passenger lawsuit.

Oil shares meanwhile rose sharply with the prices of crude on the world markets, with ExxonMobil gaining 1.9 per cent and Chevron adding nearly two percent.

Computer giant Hewlett Packard finished down 9.6 per cent after its disappointing results announced following the close on Tuesday.

Ford Motor Co. lost 2.43 per cent after announcing a recall of 150,000 F-150 pickup trucks for faulty airbags.

The bond market moved sideways after rising Tuesday on Libya worries.

The yield on the 10-year Treasury bond sat at 3.487 per cent against 3.461 per cent late Tuesday, while the 30-year was 4.598 per cent against 4.605 per cent.

Bond prices and yields move in opposite directions.