Oil Prices, Home Sales Push Stocks Lower

Stocks in New York continue to fall ahead of the long weekend as oil resumes its climb and the dollar slides. All three major indices are ticking lower.
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Updated from 9:45 a.m. EDT

Stocks in the U.S. were taking more hits Friday as investors dealt with a resuming climb in oil and abysmal home-sales numbers and unwound their positions ahead of a three-day holiday weekend. U.S. markets will be closed Monday in observance of Memorial Day.

The

Dow Jones Industrial Average

was losing 122 points to 12,504, and the

S&P 500

gave up 16 points at 1378. The

Nasdaq Composite

sank 26 points to 2439.

An early drag on the market was crude oil, which resumed its stunning upward climb following a brief corrective reprieve Thursday. Futures were rising $1.84 to $132.65 a barrel.

Gold futures were adding $8.40 to $926.70 an ounce. The U.S. dollar was back on a downward track, losing 0.5% against the euro to $1.5770 and fetching just 103.29 yen, a 1% tumble from the prior settlement.

On the economic front, the National Association of Realtors said April's existing-home sales fell 1% from March to a seasonally adjusted annual rate of 4.89 million units -- a hair better than the economists' consensus, though also a 17.5% slide from a year earlier. Total inventory jumped 10.5% sequentially and should take 11.2 months, a 23-year high, to work through at the current sales pace. That's up from a 10-month estimate in March.

"With prices collapsing, the incentive not to buy a home is increasing by the week, and with inventory showing no sign of improvement prices will keep falling," said Ian Shepherdson, chief U.S. economist with High Frequency Economics. "Supply always rises in spring so the headline inventory numbers overdo the true position, but it is still bad."

On the corporate side in the new session, striking workers at

American Axle

(AXL) - Get Report

-- the main parts supplier to automaker

General Motors

(GM) - Get Report

-- voted to accept a new employment contract and return to work next week. The strike had lasted about three months and forced GM to idle several of its manufacturing plants.

Still, GM lost ground after the company said the strike is expected to bleed $1.8 billion out of pretax second-quarter earnings, having held back production on some 230,000 vehicles. Other work stoppages caused by finalizing local union agreements will spur a further $200 billion in pretax losses this quarter, said the company. Furthermore, GM expects "only a portion of this lost production will be recovered," considering the harsh economic environment and a market shift away from the sorts of vehicles the strike impacted.

GM shares were losing 3.1%, and American Axle gave up 1.1%.

In earnings, information-technology firm

CA

(CA) - Get Report

issued bullish full-year guidance prompted by a

30% leap in bookings

compared with last year, even as a tax charge dragged fiscal fourth-quarter results well below analyst estimates. Shares were adding 6.7%.

Also, clothing retailer

Gap

(GPS) - Get Report

booked a

climbing profit

of $249 million, or 34 cents a share, but that fell short of the Street's consensus. Sales also slipped from a year earlier to a lower-than-expected $3.38 billion. Shares shed 1.6%.

Aeropostale

(ARO)

, another apparel seller, edged ahead of last quarter's bottom-line consensus as the company achieved sizable year-over-year gains in both earnings and revenue. The stock ticked up a nickel at $32.77 following a stumble out of the gate.

Treasury prices were rising Friday. The 10-year note climbed 16/32 in price to yield 3.85%, and the 30-year bond jumped 26/32 in price, yielding 4.57%.

Markets abroad were mostly falling. The Nikkei 225 in Tokyo added 0.2% overnight, but the Hang Seng Index in Hong Kong slid 1.3%. Among European bourses, the FTSE 100 slumped 0.5% and Germany's Xetra Dax was off 0.8%. The Paris Cac surrendered 1.4%.