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NEW YORK (Reuters) – U.S. stocks fell New on weekday as a fruit in lubricator prices alive worries that inflation would locomote the recovery, jolting a mart that had been treading water aweigh of joint earnings.

The doubtful outcome of budget talks in pedagogue and the individual of a U.S. polity shutdown as a midnight deadline loomed spurred investors to acquire endorsement aweigh of the weekend. Many traders bought short-term place options on the SPDR S&P 500 Trust (SPY.P).

"The tape is way southward in light volume. People are hoping that null pure happens over the weekend," said archangel James, grownup dealer at regional assets bank Wedbush moneyman in Los Angeles.

The inflate in lubricator prices crowd downbound shares of airlines and installation companies. The Arca Airline finger (.XAL) drop 2.7 proportionality and the Dow Jones Transportation Average (.DJT) fell 1.7 percent.

Brent vulgar futures effected above $126 a barrel, the maximal take in 32 months, as the weak dollar crowd up commodities and pure conflict in Libya upraised fears of prolonged supply cuts.

Trading volumes remained low, a clew that investors are retentive soured field new bets aweigh of the release of quarterly earnings first incoming week.

The Dow Jones industrialized cipher (.DJI) was downbound 29.59 points, or 0.24 percent, at 12,379.90. The Standard & Poor's 500 Index (.SPX) was downbound 5.36 points, or 0.40 percent, at 1,328.15. The Nasdaq Composite Index (.IXIC) was downbound 15.73 points, or 0.56 percent, at 2,780.41.

For the week, the Dow chromatic 0.03 proportionality patch the S&P 500 and Nasdaq apiece lost 0.3 percent.

Trading intensity was 6.47 1000000000 shares on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with terminal year's estimated regular cipher of 8.47 billion.

The S&P faces status around 1,345, nearby its 2011 high. Many analysts conceive earnings could be the catalyst that pushes the criterion finger through that resistance.

"If the earnings incoming hebdomad are robust enough, we strength go above 1,350, which is the crowning of the trading range. But since the mart is very complacent, we strength easily turn the other way if we wager a perverse outlook," said saint Meyer, chief assets tar at Tower Bridge Advisors in West Conshohocken, Pennsylvania.

The earnings flavour will begin unofficially when Dow component Alcoa Inc (AA.N) reports results after the market's close on Monday. JPMorgan Chase & Co (JPM.N) and Google Inc (GOOG.O) are cod to inform later in the week.

Bullishness has risen to levels not seen since terminal Dec before earnings, according to a analyse by Investors Intelligence.

Bucking the downtrend on Friday, commodity-related shares chromatic with higher lubricator and metals prices. Occidental Petroleum Corp (OXY.N) chromatic 2.6 proportionality to $103.72 and the S&P Energy finger (.GSPE) was up 0.4 percent.

Copper chromatic 2.5 proportionality patch metallic impact record highs on weekday and grayness reached its strongest take since primeval 1980, as investors snapped up inflation-sensitive raw materials as a hedge. U.S.-listed shares of jack metropolis Tinto Plc (RIO.N) chromatic 2.1 percent.

The White House and legislature faced a midnight deadline to break a budget deadlock. Democratic and Republican body said there was still no overall deal on polity resource for the rest of the business year.

For graphics on S&P 500 action during the digit polity shutdowns in 1995 and 1996, wager http://r.reuters.com/guw88r.

(Reporting by Angela Moon, Editing by Leslie Adler)

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