May 19 (Bloomberg) -- SanDisk Corp., the world's largest maker of flash-memory cards, fell the most in two months in Nasdaq trading after Chief Executive Officer Eli Harari said sales to makers of consumer products were ``soft'' last month.

Rising oil prices have prompted consumers to tighten their budgets, Harari told analysts at a conference sponsored by JPMorgan Chase & Co. today. Milpitas, California-based SanDisk's memory cards are used in consumer electronics such as digital cameras and media players.

``Gas prices are weighing and will weigh on consumer patterns,'' ThinkPanmure analyst Vijay Rakesh said in an interview today from Chicago. ``Demand is a little soft.''

Harari has sought to fuel growth by expanding beyond those products into memory for mobile phones and personal computers. He said last month that orders probably will increase this quarter.

SanDisk fell $2.42, or 7.5 percent, to $30.02 at 4 p.m. in Nasdaq Stock Market trading, the biggest drop in the Standard & Poor's 500 Index.

The stock had jumped more than 40 percent in the two months before today, and some investors may have used the CEO's comments as an opportunity to sell the stock at a gain, Rakesh said. The analyst advises investors buy the shares, saying prices and orders for memory probably will improve in the second half of the year.

Apple Speculation

SanDisk shares had also benefited from speculation about an order from Apple Inc., said Mike Capitani, head of equity trading at Caris & Co. in New York.

``The reason Sandisk and other memory stocks had been doing well was that there was talk Apple was going to be buying memory for the new iPhone, so when Sandisk made that comment it also hit Apple,'' Capitani said.

Analysts including Piper Jaffray & Co.'s Gene Munster expect Cupertino, California-based Apple to introduce a faster version of the iPhone next month. Apple CEO Steve Jobs has forecast sales of 10 million units this year after selling 4 million in 2007.

Apple declined $4.02, or 2.1 percent, to $183.60 today on the Nasdaq. The shares have lost 7.3 percent this year.

Confidence among U.S. consumers fell this month to its lowest level in 28 years on record-high fuel prices, lower home values and fewer jobs. Household spending from April to June may rise at a 0.5 percent pace, half the first quarter's gain and the smallest increase in 17 years, according to a Bloomberg News survey of economists.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Ville Heiskanen in New York at vheiskanen@bloomberg.net

Last Updated: May 19, 2008 16:34 EDT