(Recasts with market extending losses, adds analyst comment)

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Airline stocks slide as Israel hits targets in Iran

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US defense firms rise on Israel-Iran conflict

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Oracle surges for second day on AI optimism

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S&P 500 -1.30%, Nasdaq -1.44%, Dow -2.02%

By Noel Randewich, Kanchana Chakravarty

June 13 (Reuters) - Wall Street extended losses on

Friday after Iranian media said the country launched missiles

toward Israel, marking a response to intensive Israeli strikes

aimed at crippling Iran's ability to build nuclear weapons.

Hundreds of ballistic missiles were launched from Iran toward

Israel, Iranian media reported.

That came after Israel struck nuclear facilities and missile

factories in Iran, escalating tensions in the Middle East and

undermining global investor confidence.

The S&P 500 was down 1.30% at 5,966.76 points, extending

earlier losses.

The Nasdaq declined 1.44% to 19,380.43 points, while the Dow

Jones Industrial Average was down 2.02% at 42,097.69 points.

Oil prices surged nearly 7% on fears the conflict could disrupt

crude supply from the Middle East. U.S. energy stocks rose in

tandem, with Exxon rallying 2.1% and Diamondback Energy ( FANG )

rising 3%.

"It looks as though we could be in for a full-blown military

conflict," Elias Haddad, senior markets strategist at Brown

Brothers Harriman, said earlier on Friday. "If it ends up

closing down the Strait of Hormuz, where a third of global oil

supply goes through, this could have some pretty nasty effect on

global markets."

Airline stocks fell on fears that fuel costs could climb.

Delta Air Lines ( DAL ) lost 3.8%, United Airlines fell

4.7% and American Airlines ( AAL ) declined 4.8%.

Defense stocks climbed, with Lockheed Martin ( LMT ) up

3.4%, RTX Corporation ( RTX ) gaining 3.3% and Northrop Grumman ( NOC )

rising 3.5%.

Of the 11 S&P 500 sector indexes, 10 declined, led lower by

financials, down 2.22%, followed by a 1.74% loss in

information technology.

Photoshop maker Adobe fell 5.3% as concerns that the

pace of the company's AI adoption was too slow overshadowed an

increased annual revenue forecast.

Oracle jumped 7% to a record high, and it is now up

more than 21% in two days since the technology company gave an

upbeat forecast driven by demand for its AI services.

Nvidia ( NVDA ) dipped 2.5% and Apple ( AAPL ) lost 1.6%.

Visa and Mastercard ( MA ) both lost over 5% after the

Wall Street Journal reported that major retailers are exploring

cryptocurrencies that could eliminate the need for payment

intermediaries.

Shares of Boeing ( BA ) fell 2%.

A tame consumer price report, softer-than-expected producer

price data and largely unchanged initial jobless claims earlier

this week helped calm investor jitters around tariff-driven

price pressures. U.S. Federal Reserve policymakers are widely

expected to keep interest rates unchanged at their meeting next

week.

With investors betting the United States will reach trade

agreements that reduce President Donald Trump's steep trade

barriers, the S&P 500 is now trading just below its February

record highs.

The University of Michigan's Surveys of Consumers showed

consumer sentiment improved for the first time in six months in

June amid trade uncertainty.