NEW YORK, Sept 27 (AFP) - US stocks trade lower Monday as a spike in crude oil futures to a new record high dampened sentiment on Wall Street, overshadowing a positive report on housing.
The Dow Jones Industrial Average slipped 34.29 points (0.34 percent) to 10,012.95 and the Nasdaq composite dropped 9.62 points (0.51 percent) to 1,869.86 at 1520 GMT.
The broad-market Standard and Poor's 500 index dipped 4.18 points (0.38 percent) to 1,105.93.
The market was jittery from the start as the price of light sweet crude for November delivery climbed to an all-time high of 49.57 dollars per barrel at 1455 GMT on the New York Mercantile Exchange, edging closer to the symbolic level of 50 dollars.
That topped the previous record peak of 49.40 dollar per barrel reached on August 20.
"Crude is at the heart of much of the market's angst," said Marc Pado, US market strategist at Cantor Fitzgerald, adding that earnings warnings, technical selling, terrorism concerns before the election and a slew of economic news this week were also keeping traders cautious.
"It will be tough to make much headway under these conditions."
The market shrugged off a better-than-expected report showing sales of new homes in the United States jumped 9.4 percent in August to a seasonally adjusted annual rate of 1.184 million.
Some analysts said the market appears poised for a correction after failing to sustain the uptrend of recent weeks.
"The market appears to have turned back down in this trading range that has held it all year, and if the cycle continues as before, we believe this could mean that there is another month or two of softer market ahead," said Bob Dickey, technical strategist at RBC Dain Rauscher.
"The September-October period is often a time when the market makes a bottom, and we believe that this year will be the same, and then lead to a strong year-end run."
Among active shares, Wal-Mart managed a gain of two cents to 52.83, one of the handful of blue chips trading higher, after the retail giant was upgraded to "buy" from "neutral" at Banc of America in a valuation call.
Coca-Cola shares fell 18 cents to 39.81 after Credit Suisse First Boston cut his 2005 earnings outlook for the soft drink maker.
The tech sector was pressured after Morgan Stanley lowered its rating on the semiconductor sector to "in line" from "attractive" due to a sharp deceleration in revenue growth in the industry and a significant earnings warnings from chip companies.
Despite the downgrade, Intel managed to gain two cents to 20.15, Advanced Micro Devices was up seven cents to 12.49 but Micron Technology fell six cents to 12.33.
Elsewhere in the tech sector, Prudential went "neutral" on the communications equipment sector and sliced Nortel Networks, saying its business momentum appears to have stalled in 2004. Nortel shares fell six cents to 3.35 and Lucent Technologies declined six cents to 3.12.
Airline shares were hurting as a result of the latest oil price spike. American Airlines parent AMR shed 44 cents to 7.03 and Continental Airlines gave back 48 cents to 8.29.
Bonds firmed on the move away from equities. The yield on the 10-year US Treasury bond declined to 4.008 percent from 4.031 percent Friday and that on the 30-year bond to 4.781 percent against 4.811 percent. Bond yields and prices move in opposite directions.