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NEW YORK - WALL Street investors endured fresh losses on Friday in the face of a continued rally in world oil prices which briefly shot past US$142 (S$194) a barrel.
Traders also blamed economic jitters and nervousness about the banking sector for pushing stocks lower.
The blue-chip Dow Jones Industrial Average closed down 106.91 points, or 0.93 per cent, at 11,346.51 following a sell-off in global equities and heavier losses a day earlier.
The Dow had earlier on Friday tumbled to around 11,298.15 points, marking a hefty 20 per cent slide into bear market territory from its all-time closing high of 14,164.53 points struck on October 9 of last year, before recovering some ground.
The technology-heavy Nasdaq composite shed 5.74 points, or 0.25 per cent, to 2,315.63 and the Standard & Poor's 500 broad-market index lost 4.77 points, or 0.37 per cent, to close at 1,278.38.
'The stock market is understandably concerned about high oil prices and weak balance sheets at financial institutions. Market sentiment remains very poor,' analysts at Briefing.com said.
Investors are worried about surging oil prices amid fears they could crimp already lacklustre economic growth, especially as some economists say the world's largest economy is on the brink of recession.
A key New York oil futures contract closed up 57 cents at a record US$140.21 a barrel Friday after earlier smashing the US$142-a-barrel barrier for the first time.
The Federal Reserve brought its rate-cutting drive to a halt on Wednesday as it announced it would keep its base interest rate pegged at 2.0 per cent in the face of mounting inflationary pressures.
Wall Street sentiment has already been dented by a lingering housing market slump and a credit crunch which has roiled the finances of many big banks.
The strong rise in oil costs over the past year has forced major airlines, Detroit automakers and other firms to overhaul their business models amid growing consumer angst about rising energy costs.
Stocks gained some support from an economic report which showed US consumer spending rose 0.8 per cent in May, partly as Americans spent the proceeds of tax rebate checks.
Some economists say, however, that the economy will face further problems once the one-off rebates and spending boost from a US$168-billion economic stimulus expire later this year. -- AFP
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