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Indexes down: Dow 1.06%, S&P 500 0.53%, Nasdaq 0.65%

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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

(Updates with afternoon trading levels)

By Kanchana Chakravarty and Sukriti Gupta

June 13 (Reuters) - Wall Street's main indexes fell on

Friday after Israel struck a series of nuclear facilities and

missile factories in Iran, escalating tensions in the oil-rich

Middle East and undermining global investor confidence.

Israel's attacks were aimed at preventing Tehran from

building an atomic weapon, while Iran has promised harsh

reprisals.

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 up 1.7% and Diamondback

Energy ( FANG ) rising 3.2%.

Airline stocks dropped on fears that fuel costs could surge

if bottlenecks squeezed supply. Delta Air Lines ( DAL ) was down

2.1%, United Airlines fell 2.6% and American Airlines ( AAL )

declined 3.2%.

Defense stocks climbed, with Lockheed Martin ( LMT ) up

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

rising 3.5%.

"I think the market understands that this is a continuation

of the war between Iran and Israel... I don't think the market

expects it to escalate too dramatically from here," said Jed

Ellerbroek, portfolio manager at Argent Capital Management.

At 11:38 a.m. ET, the Dow Jones Industrial Average

fell 453.51 points, or 1.06%, to 42,514.11, the S&P 500

lost 32.29 points, or 0.53%, to 6,012.97, and the Nasdaq

Composite dropped 127.05 points, or 0.65%, to 19,535.43.

Eight of the 11 major S&P 500 sub-sectors fell. Energy

stocks gained 1.3%, while financials was the

worst hit with a 1.5% drop.

The S&P 500 and the Nasdaq were set to log their third

week of gains, while the Dow was on track for its first weekly

loss in three weeks.

Photoshop-maker Adobe fell 5.2% despite raising its

full-year results forecast.

Most megacap and growth stocks declined. Nvidia ( NVDA ) was

1.5% lower and Apple ( AAPL ) lost 0.8%.

Visa shares hit a more than four-week low and were

last down 5.2%.

Shares of Boeing ( BA ) fell nearly 2%, weighing on the

blue-chip Dow.

U.S.-listed shares of gold miners rose tracking an increase

in bullion prices. Newmont ( NEM ) gained 2.4%, while AngloGold

Ashanti ( AU ) added 3.1%.

The S&P 500 was 2.1% below its record high reached

earlier this year, after upbeat corporate earnings and a

softening in U.S. President Donald Trump's trade stance drove

stellar monthly gains in May.

The tech-heavy Nasdaq is about 3.2% off its record

closing high reached in December last year.

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. However, U.S. Federal Reserve policymakers are

widely expected to keep interest rates unchanged at their

meeting next week.

A University of Michigan

Surveys

of Consumers showed consumer sentiment improved for the

first time in six months in June amid trade uncertainty.

Declining issues outnumbered advancers by a 3.27-to-1 ratio

on the NYSE and by a 3.33-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and three new

lows, while the Nasdaq Composite recorded 23 new highs and 90

new lows.