Feb. 22 (Bloomberg) -- U.S. stocks fell as oil prices climbed to $50 a barrel, spurring concern that higher fuel costs may crimp profit growth.

``It seems to be oil once again playing a big role,'' said Brian Slater, who helps oversee $500 million at Condor Capital Management in Martinsville, New Jersey. ``There might be some people out there a little antsy due to the rise in oil.''

Retailers declined after Home Depot Inc.'s quarterly profit failed to exceed analysts' forecasts and Federated Department Stores Inc. said earnings this quarter may trail analysts' estimates.

The Dow Jones Industrial Average fell 43.59, or 0.4 percent, to 10,741.63 as of 11:32 a.m. in New York. The Standard & Poor's 500 Index was down 2.99, or 0.3 percent, at 1198.60. The Nasdaq Composite Index slipped 3.97, or 0.2 percent, to 2054.65.

Two stocks retreated for every one that rose on the New York Stock Exchange. Some 632.4 million shares changed hands on the Big Board, 15 percent more than the same time a week ago.

Crude oil for March delivery rose 3.5 percent to $50.05 a barrel in New York, the highest since Nov. 30. Oil climbed as colder-than-normal weather in the U.S. and Europe boosts demand for furnace fuels. Energy stocks including Exxon Mobil Corp. got a boost from the increase in oil futures.

Home Depot

An S&P 500 measure of retailers fell 1.1 percent and was the biggest drag on the benchmark among 24 industry groups.

Home Depot lost $1.24, or 3 percent, to $40.78 for the worst performance in the Dow industrials. The world's largest home- improvement retailer said earnings rose 9.5 percent to 47 cents a share, matching the average estimate in a survey of analysts by Thomson Financial.

Federated, which is reported to be in talks to buy May Department Stores Co., slipped 94 cents to $55.78. The company said earnings this quarter will be as much as 50 cents a share, less than the 53-cent average analyst estimate in a Thomson poll.

Benchmark indexes came off their lows after a private survey showed higher-than-expected consumer confidence. The Conference Board's sentiment index decreased to 104 this month from a revised 105.1 in January. Economists forecast a reading of 103, the median estimate in a Bloomberg News survey.

Inflation

The Labor Department tomorrow will probably say consumer prices in January rose 0.2 percent from the previous month, according to economists surveyed by Bloomberg. The annualized increase in the core index was likely 2.3 percent, the most since August 2002, surveys showed. The Federal Reserve has raised its target interest rate six times since June to curb inflation.

Gains in energy and semiconductor shares kept benchmark indexes from falling further. Exxon, the world's largest publicly traded oil company, rose 54 cents to $59.95.

A gauge of semiconductor stocks gained 1.2 percent for the steepest increase among 24 industry groups in the S&P 500 after Citigroup Global Markets Inc. boosted its rating on the group to ``overweight'' from ``market weight.'' The firm added Intel Corp. to its list of stocks that it recommends investors buy.

Semiconductor shares may outperform the rest of the market as investors expect pricing of chips to improve, said Tobias Levkovich, chief U.S. equity strategist of Citigroup's Smith Barney unit, in a note to investors.

Intel, the world's biggest computer-chip maker, advanced 18 cents to $24.20. National Semiconductor Corp., whose chips boost battery life in mobile phones and laptop computers, added 75 cents to $19.68. Cisco Systems Inc., which Levkovich also added to Citigroup's recommended list, increased 19 cents to $17.49.

Dollar's Decline

Some investors said the dollar's decline weighed on share prices. The dollar fell the most in more than four months against the yen and dropped versus the euro, Korean won and at least 30 other currencies after the Bank of Korea said it plans to diversify its reserves.

``You're seeing an ally is losing faith in the strength of the dollar,'' said Larry Peruzzi, senior equity trader at Boston Co. ``It may put a little bit of a burden on the Fed to get involved and do something. I think it might mean higher rates.''

The dollar fell to 104.11 yen in New York from 105.54 late yesterday in Toronto, according to EBS, an electronic foreign- exchange dealing system. It dropped to as low as $1.3234 per euro from $1.3068.

Sirius

Sirius Satellite Radio Inc., the No. 2 pay-radio company, fell 26 cents to $5.61. The U.S. Securities and Exchange Commission is probing the company's acquisition of Howard Stern's radio show, Chaunce Hayden, a guest of the show, said in an interview. Sirius spokesman Patrick Reilly said no company employees received subpoenas for an SEC probe related to the deal.

Medtronic Inc. retreated 66 cents to $52.34. Sales growth at the world's biggest maker of implantable defibrillators may lag behind expectations as the company's markets slow or become more competitive, Credit Suisse First Boston analyst Adam Galeon wrote in a note to clients. Galeon cut his rating on the stock to ``neutral'' from ``outperform.''

Shares of Winn-Dixie Stores Inc. were not yet trading on the NYSE. The operator of about 920 supermarkets in the southern U.S. filed for Chapter 11 bankruptcy protection after losses and a reduction of credit from vendors limited the company's access to cash. Wachovia Bank NA has agreed to provide an $800 million debtor-in-possession loan to supplement cash flow during the reorganization process. The retailer's stores remain open.

Kerr-McGee Surges

Kerr-McGee Corp. surged $3.15, or 4.5 percent, to $73.65. The oil company said in a statement that investor Carl Icahn and an Icahn-related partnership notified the company that they may buy as much as $1 billion of Kerr-McGee stock.

Level 3 Communications Inc. climbed 48 cents, or 25 percent, to $2.41. The operator of a fiber-optic communications network said it plans to raise $880 million by selling convertible notes.

GlaxoSmithKline Plc's American depositary receipts rose $1.44 to $49. Europe's biggest drugmaker jumped after a U.S. advisory panel said on Feb. 18 that Merck & Co.'s Vioxx painkiller and similar treatments should stay on the market, easing investor concerns about regulatory restrictions.

Shares of MCI Inc., the second-largest U.S. long-distance telephone company, added 15 cents to $22.46 on expectation that Qwest Communications International Inc. will sweeten its $8 billion takeover offer for the company as soon as this week.

Qwest executives are considering announcing new terms of the company's cash and stock offer as early as Wednesday, said a person familiar with the matter. The Wall Street Journal earlier reported a new offer may come this week. Tyler Gronbach, a spokesman for Qwest, declined to comment. Qwest rose 2 cents to $3.97.

To contact the reporter on this story: Dune Lawrence in New York at dlawrence6@bloomberg.net.

Last Updated: February 22, 2005 11:33 EST