Wall St Drops On Iran Tensions; Bernanke Ahead

U.S. stocks fell on Wednesday, pressured by escalating tensions between Iran and the West and caution before testimony from Federal Reserve.

U.S. stocks fell on Wednesday, pressured by escalating tensions between Iran and the West and caution before testimony from Federal Reserve Chairman Ben Bernanke.

Bernanke is expected to be questioned about the effect of the subprime mortgage market crisis on the economy.

U.S. crude oil rose near $64 a barrel as Britain responded to Iran's detention of Royal Navy personnel. Crude futures shot to $68.09 late Tuesday on a false rumor that a U.S. naval vessel had clashed with Iran.

Shares of Wal-Mart Stores declined 1.4 percent to $46.82 after comments from the chief executive of the world's largest retailer that 2007 is going to be a "challenging" year. For details, see ID:nN27222383

"We've got Mr. Bernanke coming up, and we're watching crude oil...We want to see how Bernanke characterizes the economy and if he sheds any more light on what the Fed is going to do," said Frank Lesh, futures analyst and broker at Futurepath Trading LLC in Chicago.

The Dow Jones industrial average was down 58.56 points, or 0.47 percent, at 12,338.73. The Standard & Poor's 500 Index was down 6.77 points, or 0.47 percent, at 1,421.84. The Nasdaq Composite Index was down 12.89 points, or 0.53 percent, at 2,424.54.

Bernanke's testimony before the congressional Joint Economic Committee is expected to start at 10:30 a.m. (1430 GMT) For more on the subprime mortgage market, see ID:nN16195443.

Shares of home builders extended recent losses after Beazer Homes USA Inc., the sixth-largest U.S. home builder, said it is cooperating with federal prosecutors in a probe relating to its mortgage business. ID:nN28258480

Beazer shares dropped 11.7 percent to $27.73. Among other home builders on the NYSE, KB Home shares fell 2.3 percent to $44.28, while shares of Toll Brothers declined 2 percent to $27.85.

A government report showed new orders for U.S.-made durable goods -- items meant to last three or more years -- rose by a smaller-than-expected amount in February. Excluding volatile transportation orders, durable goods orders fell for the fourth time in the last five months. For details, see ID:nN27193063

Analysts said the report added to worries about growth for profits and the economy.

Oil prices were last up $1.57 at $64.50.