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Indexes down: Dow 1.52%, S&P 500 1%, Nasdaq 1.16%

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Airline stocks slide as Israel strikes Iran

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US defense firms rise on Israel-Iran conflict

(Updates after markets open)

By Kanchana Chakravarty and Sukriti Gupta

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

Friday after Israel's deadly strike on Iranian nuclear

facilities inflamed tensions in the oil-rich Middle East and

battered risk sentiment across global markets.

Israel has warned that the widescale strikes were the start

of a prolonged operation to prevent Tehran from building an

atomic weapon. Iran has promised a harsh response.

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%.

Airline stocks dropped as fuel costs could surge if supply

bottlenecks materialize. Delta Air Lines ( DAL ) was down 3.7%,

United Airlines dropped 4.4%, and American Airlines ( AAL )

declined 4.7%.

Defense stocks climbed, with Lockheed Martin ( LMT ), RTX

Corporation ( RTX ), Northrop Grumman ( NOC ) gaining between

2.2% and 3.2%.

"We have major domestic policy uncertainty and now on top of

that, you have geopolitical unrest, which not only is impacting

oil markets, but the broader risk premium," said Eric Teal,

chief investment officer at Comerica Wealth Management.

Washington said it had no part in the operation, but

President Donald Trump suggested Iran had brought the attack on

itself by resisting U.S. demands to restrict its nuclear

program.

Trump also urged Iran to make a deal, saying "the next

already planned attacks" will be "even more brutal".

Israeli Prime Minister Benjamin Netanyahu's office said he

would speak to Trump later in the day.

At 10:13 a.m. ET, the Dow Jones Industrial Average

fell 659.45 points, or 1.52%, to 42,313.10, the S&P 500

lost 60.38 points, or 1.00%, to 5,984.88 and the Nasdaq

Composite lost 227.71 points, or 1.16%, to 19,435.01.

Ten of the 11 major S&P 500 sub-sectors fell, with only

energy stocks gaining 1.2%. Financials declined

the most, with a 2.1% fall. Information technology

lost 1.3%, weighed down by Adobe's shares.

Adobe fell 6.6% despite the Photoshop maker raising its

full-year results forecast.

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

down 2.1%, Apple ( AAPL ) fell 1.5% and Amazon ( AMZN ) lost

1.3%.

Visa shares hit an over four-week low and were last

down 5.9%.

U.S.-listed shares of gold miners rose tracking a rise in

bullion prices. Newmont ( NEM ) gained 2.2%, while AngloGold

Ashanti ( AU ) rose 2.1%.

The S&P 500 remains 2.6% below its record high

reached earlier this year, following stellar monthly gains in

May driven by upbeat corporate earnings and a softening in

Trump's trade stance.

The tech-heavy Nasdaq is about 3.8% 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, Federal Reserve policymakers are

widely expected to keep rates unchanged at their meeting next

week.

A University of Michigan survey showed consumer sentiment

increased to 60.5 for June from the previous month, according to

a preliminary estimate.

Declining issues outnumbered advancers by a 3.88-to-1 ratio

on the NYSE and by a 4.4-to-1 ratio on the Nasdaq.

The S&P 500 posted 8 new 52-week highs and 2 new lows while

the Nasdaq Composite recorded 18 new highs and 70 new lows.