NEW YORK - UNITED States stocks tumbled on Friday as fears about the stability of the top two home financing providers Fannie Mae and Freddie Mac, combined with oil at a record above US$147 (S$199), clouded the economic outlook.

Friday's slide capped a tumultuous week, in which the S&P 500 joined the Nasdaq and the Dow in a bear market. It was the Nasdaq and the S&P 500's sixth straight weekly decline, their longest weekly losing streaks since 2004.

The broad market ended Friday's session down 1 per cent as investors worried that the two pillars of the United States housing market could run short of capital, placing the fragile US economy at even greater risk.

A jump in US crude oil prices to a record above US$147 per barrel further soured investor sentiment on concerns about the impact of higher fuel costs on corporate profits and consumer spending.

'The bottom line is that we're in the middle of a financial tsunami. This is a storm the likes of which this country hasn't seen,' said Mr Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

The Dow Jones industrial average fell 128.48 points, or 1.14 per cent, to 11,100.54. For the week, the Dow dropped 1.7 per cent, its fourth straight weekly decline.

The Standard & Poor's 500 Index slid 13.90 points, or 1.11 per cent, to 1,239.49. For the week, it fell 1.9 per cent.

The Nasdaq Composite Index dropped 18.77 points, or 0.83 per cent, to 2,239.08. It shed 0.3 per cent for the week.

But all three indexes ended off their session lows. At one point, all three indexes were down more than 2 per cent, with the Dow briefly dipping below the 11,000 level for the first time since July 2006. In a volatile session, major indexes also briefly turned positive in the late afternoon.