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AP, NEW YORK -- Stocks pulled back Tuesday as oil prices rebounded and losses from JPMorgan Chase & Co. raised more concerns about the financial sector.
Oil rose after BP Plc said it shut down an oil pipeline that runs through Georgia as a precautionary measure due to the fighting between Georgian and Russian troops. The company said it wasn't aware of any Russian bombings on pipelines in the region, but the notion of diminished supplies sent oil climbing. Light, sweet crude rose 26 cents to $114.71 a barrel on the New York Mercantile Exchange. Oil has fallen more than $30 from its July 11 high of $147.27, easing concerns about inflation.
The latest reminder of continuing troubles in the financial sector came when JPMorgan said late Monday it has incurred wider losses in its mortgage holdings so far in the third quarter than in the second quarter.
The company's disclosure in a regulatory filing that it has lost $1.5 billion, after hedges, in its mortgage-backed securities and loans this quarter offered fresh signs of the scope of the troubles in the credit markets. In the second quarter, the company's losses tied to souring mortgage debt totaled $1.1 billion.
Still, some investors likely saw the losses as relatively small compared with the more than $300 billion that financial institutions have written down over all in the past year.
In the first hour of trading, the Dow Jones industrial average fell 65.13, or 0.55 percent, to 11,717.22.
Broader stock indicators also rose. The Standard & Poor's 500 index fell 6.92, or 0.53 percent, to 1,298.40, and the Nasdaq composite index fell 10.50, or 0.43 percent, to 2,429.45.
Bond prices rose as stocks declined. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.95 percent from 4.00 percent late Monday.
The dollar was higher against most other major currencies, while gold prices fell.
Meanwhile, a Commerce Department report showed the nation's trade deficit shrank in June, rather than growing as expected. The trade imbalance dropped 4.1 percent to $56.8 billion in June from a revised May deficit of $59.2 billion, as exports rose to an all-time high. It was the smallest deficit in three months and was better than the $61.5 billion deficit Wall Street had been expecting.
Financial stocks declined. JPMorgan fell $2.31, or 5.5 percent, to $39.58.
UBS AG, Switzerland's largest bank, fell 56 cents, or 2.6 percent, to $21.13 after reporting Tuesday it had further losses and write-downs of $5.1 billion during the second quarter of 2008.
Declining issues outnumbered advancers by about 8 to 5 on the New York Stock Exchange, where volume came to 145.7 million shares.
The Russell 2000 index of smaller companies fell 4.81, or 0.64 percent, to 746.25.
Overseas, Japan's Nikkei stock average fell 0.95 percent. In afternoon trading, Britain's FTSE 100 fell 0.12 percent, Germany's DAX index declined 0.51 percent and France's CAC-40 fell 0.54 percent.
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