May 19 (Bloomberg) -- U.S. stocks extended their weekly drop, pushing the Nasdaq Composite Index to its longest losing streak in 22 years, on lingering concern that the Federal Reserve will keep raising interest rates to curb inflation.
Shares of energy companies including Sunoco Inc. and raw- material producers led today's retreat on the prospect higher borrowing costs will slow economic growth and crimp demand for oil and metals.
``Clearly there's a big fear over interest rates, how much inflation are we going to have, what the Fed's going to do,'' said Scott Wren, senior equity strategist at A.G. Edwards & Sons Inc. in St. Louis. ``We were expecting some rockiness in the commodities market and the cyclical stocks.''
The Standard & Poor's 500 Index headed for its worst two- week performance since 2003. It was down 2.70, or 0.2 percent, to 1259.11 today as of 12:05 p.m. in New York.
The Dow Jones Industrial Average lost 37.78, or 0.3 percent, to 11,090.51, weighed down by Intel Corp. The Nasdaq fell 8.20, or 0.4 percent, to 2172.12, dropping for a ninth straight day, the longest such streak since May 1984.
The Dow average has slumped 2.6 percent since May 12, heading for its worst weekly performance since January. The S&P 500 has lost 2.5 percent and the Nasdaq is down 3.2 percent.
The S&P 500 has lost 5.1 percent over the past two weeks in the wake of the Fed's May 10 decision to lift its benchmark lending rate for a 16th straight time in an attempt to fight inflation. The retreat was the worst since March 2003.
Energy
Crude oil fell 1.1 percent to $68.70 a barrel in New York after Iran signaled it may allow United Nations atomic agency inspectors better access, easing concern about shipments from the fourth-biggest producer.
The retreat sent energy shares down 0.6 percent. Sunoco, the top oil refiner in the U.S. Northeast, lost $1.87 to $64.77.
Copper prices headed for their biggest drop in 17 months on concern higher interest rates will curb demand for metals.
Phelps Dodge Corp., the world's No. 3 copper producer, slid $4.64 to $81.21, bringing its weekly drop to 15 percent. Freeport-McMoRan Copper & Gold Inc., which operates the biggest gold mine and second-largest copper mine, declined $1.68 to $53.27.
Dell, Advanced Micro
One bright spot in the market was Advanced Micro Devices Inc. after Dell Inc. announced late yesterday that it would start using the company's chips. Advanced Micro rose $2.68, or 8.6 percent, to $34.03 for the two gain in the S&P 500. Dell, the world's largest maker of personal computers, added 7 cents to $24.02.
The decision to use Advanced Micro's processors ends a 22- year exclusive agreement with Intel, the world's largest semiconductor maker. Intel lost 50 cents to $18.15.
Seven stocks fell for every three that rose on the New York Stock Exchange. Some 988 million shares changed hands on the Big Board, 23 percent more than the same time a week ago.
Caremark Rx Inc., the second-biggest U.S. manager of drug benefits, dropped $3.07 to $45.82. The company said it received a grand jury subpoena and a request from U.S. regulators for information on stock-option grants and a company relocation program. The request from the U.S. Securities and Exchange Commission is an informal inquiry, Caremark said.
A measure of health-care companies in the S&P 500 retreated 0.6 percent and was the biggest drag on the S&P 500.
Genentech
Genentech Inc. rose $2.27 to $78.30. The world's second- biggest biotechnology company was upgraded to ``overweight'' from ``equal-weight'' by Morgan Stanley analyst Steven Harr. He wrote in a note that investors are ``underestimating'' the potential for Lucentis, Genentech's treatment for age-related macular degeneration, which the company expects will be approved by the U.S. Food and Drug Administration in late June.
Morgan Stanley's chief investment strategist Henry McVey also added Genentech to the company's focus list, replacing Analog Devices Inc., citing a move away from ``more economically sensitive stocks.''
Marvell Technology Group Ltd., a maker of communication and storage equipment, rallied $4.45 to $54.16. Marvell said revenue in the first quarter ended April 29 rose 43 percent to $521.2 million, beating the $516.9 million average estimate of analysts in a Thomson Financial survey.
AnnTaylor Stores Corp. rose 74 cents to $38.04. The women's clothing retailer posted fiscal first-quarter profit of 53 cents a share. Analysts surveyed by Thomson projected 40 cents, on average. The company raised its yearly profit forecast by 10 cents a share to as much as $1.75.
Qwest Communications International Inc. added 31 cents to $6.52 after CNBC host Jim Cramer recommended the shares on his ``Mad Money'' show. Cramer said Qwest, the fourth-largest U.S. local phone company, is ``becoming a money-making machine.''
