Stocks dipped lower on Wednesday after a sharp rise in oil prices heightened concerns that higher energy costs would affect corporate profits, slowing the economy.
The Dow Jones Industrial Average dropped 52.54, or 0.5 percent, to 10,544.90. The Standard & Poor's 500 Index slid 4.04, or 0.3 percent, to 1,227.16. The Nasdaq Composite Index fell 22.42, or 1 percent, to 2,149.33.
Light sweet crude oil futures settled $1.98 higher at $65.09 a barrel after the government reported a larger-than-expected drop in crude oil inventories two weeks after Hurricane Katrina disrupted oil refinery production in the Gulf of Mexico.
Among local movers, shares of Image Entertainment Inc. surged 47.3 percent to $4.42 after the Chatsworth-based entertainment company said it would mull an unsolicited offer of up to $93 million from Lions Gate Entertainment Corp. to acquire 100 percent of its shares. In a statement, Image said it is not for sale but that it appointed a special committee to evaluate Lions Gate's offer "on its merits."
And Smart & Final Inc. rose 0.2 percent to $13.42 after the City of Commerce-based food service warehouse store owner said it settled a class-action lawsuit that alleged the company didn't properly compensate store employees over a six-year period. The company said it expects to take a $19 million pre-tax charge in the third quarter to cover settlement costs, including attorneys' fees and administrative expenses.
On the down side, Farmer Bros. Co. fell 4.7 percent to $19.82 after the Torrance-based distributor of coffee said late Tuesday that it had a fourth-quarter net loss of 27 cents a share, compared with net income of 15 cents a year earlier, hurt by higher prices for green coffee.
And shares of Hanmi Financial Corp. and East West Bancorp Inc. sunk after Wedbush Morgan Securities analyst Kathleen Steinbrecher initiated coverage of both of the L.A.-area bank holding companies' stocks. L.A.-based Hanmi dipped 1.4 percent to $18.33 after it was rated "hold"; San Marino-based East West slipped 1.1 percent to $32.45 after it was rated "buy."
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