US STOCKS-Oil price, financials weigh on Dow; techs flat

(Updates to afternoon, changes byline)

*Market falls as oil hits record high

*Bernanke says market recovery incomplete

*Hewlett-Packard weighs on indexes

By Caroline Valetkevitch

NEW YORK, May 13 (Reuters) - U.S. stocks declined on Tuesday as oil rose to another record, underscoring concerns about inflation, and the Federal Reserve chairman said financial markets are still troubled.

Fed chief Ben Bernanke said strong demand from financial institutions to borrow from the Fed showed "markets are still far from normal." Shares of financial companies led declines on the S&P 500 index, with JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) down 2.6 percent at $46.01.

The Nasdaq composite index was little changed, however, after a jump in shares of Yahoo Inc (YHOO.O: Quote, Profile, Research) limited the index's losses. Cable network CNBC said Carl Icahn is considering launching a proxy fight at the Internet company after talks between Yahoo and Microsoft (MSFT.O: Quote, Profile, Research) about a takeover were abandoned. Yahoo shares rose more than 2 percent to $25.97.

Crude oil futures came within a whisker of $127 per barrel before retreating a bit.