US STOCKS-Wall St falls as Israel's strikes on Iran erode risk appetite

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 XOM.N up 1.7% and Diamondback Energy FANG.O rising 3.2%.

Airline stocks dropped on fears that fuel costs could surge if bottlenecks squeezed supply. Delta Air Lines DAL.N was down 2.1%, United Airlines UAL.O fell 2.6% and American Airlines AAL.O declined 3.2%.

Defense stocks climbed, with Lockheed Martin LMT.N up 3.4%, RTX Corporation RTX.N gaining 3.3% and Northrop Grumman NOC.N 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 .DJI fell 453.51 points, or 1.06%, to 42,514.11, the S&P 500 .SPX lost 32.29 points, or 0.53%, to 6,012.97, and the Nasdaq Composite .IXIC dropped 127.05 points, or 0.65%, to 19,535.43.

Eight of the 11 major S&P 500 sub-sectors fell. Energy stocks .SPNY gained 1.3%, while financials .SPSY 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.O was 1.5% lower and Apple AAPL.O lost 0.8%.

Visa V.N shares hit a more than four-week low and were last down 5.2%.

Shares of Boeing BA.N 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.N gained 2.4%, while AngloGold Ashanti AU.N added 3.1%.

The S&P 500 .SPX 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 .IXIC 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.