[CentOS] xargs with max each line / argument

How do I pass xargs input one line at a time to subsequent command?
For example I want to install rubygems by reading a text file as shown
below, however the arguments are getting passed all at once to the
'gem install' command. I hace tried -L (max-lines) and -n (max args)
options, but it didn't work. What's missing here?? Any help?

$ cat gem.list.1
mkrf
rake
xmlparser

$ awk '{ print $0 }' gem.list.1 | xargs -L 1 -0 -I name sudo gem install name
ERROR:  could not find gem mkrf
rake
xmlparser
 locally or in a repository


thanks,
neuby.r