The new surge of fighting in Iraq further roiled U.S. markets Thursday, and sent airline stocks into a tailspin. The price of light sweet crude oil jumped by $2.53 a barrel to $106.93 as the Sunni militant group ISIS captured several key cities, raising worries about Iraqi oil production.
The Dow Jones industrial average (^DJI) fell 109 points -- its second straight triple digit loss -- the Nasdaq composite (^IXIC) dropped 34, and the Standard & Poor's 500 index (^GPSC) lost 13 points.
Airline stocks had benefited from relatively stable oil prices over the past year, and rising prices could hurt earnings. United-Continental (UAL) slid 6½ percent, American Airlines (AAL) and Delta (DAL) lost 5 percent and Southwest (LUV) fell 4½ percent. Even with that drop, Southwest shares are still up 85 percent from a year ago.
On the other side of the oil ledger, some drilling companies rallied. Noble (NBL) and Transocean (RIG) both rose 3 percent and Diamond Offshore (DO) gained nearly 4 percent.
Some of the big global oil companies also gained. Chevron (CVX), BP (BP), Royal Dutch (RDS) and Conoco Phillips (COP) all rose about 1 percent, but Exxon (XOM) was little changed.
Lululemon (LULU) was one of the day's big losers, tumbling 16 percent after reporting sharply lower earnings and reducing its guidance for the year.
But Restoration Hardware (RH) jumped 13 percent as net and sales at the home furnishings retailer both topped expectations.
And Lands' End (LE) rose 8½ percent as earnings rose in its first quarterly report since being spun off from Sears (SHLD). Despite today's gain, Lands' End is off about 14 percent since it began trading independently.
Amazon (AMZN) fell 2½ percent after launching a music streaming operation linked to its Prime delivery service.
Also in the Internet and social media arena, Facebook (FB) and Netflix (NFLX) both fell about 2 percent, and Google (GOOG) lost more than 1 percent. But Twitter (TWTR) gained 3½ percent on a report it may shake up its roster of top executives.
Finally, a pair of low-priced biotechs rallied. Geron (GERN) jumped 21 percent after the FDA lifted a hold on clinical trials of its drug to treat myelofibrosis.
And Zalicus (ZLCS) soared 39 percent on positive test results for its rheumatoid arthritis treatment.
What to Watch Friday:
- The Labor Department releases the Producer Price Index for May at 8:30 a.m. Eastern time.
- The University of Michigan releases its initial survey of Consumer Sentiment for June at 9:55 a.m.