Wall Street retrenched Friday as the trade deficit widened and oil prices surged, while a weak quarterly report from Dell also disheartened the market. The major indexes ended the week mixed.
Traders were displeased when the Commerce Department reported that the trade deficit is running higher than last year's all-time record.
More than half the deterioration in June reflected America's surging foreign oil bill, which hit a record high of $19.9 billion, an increase of almost 10 percent from May. Analysts say climbing oil prices will send that figure higher in coming months.
Crude oil futures hit new highs on reports of U.S. refinery outages. A barrel of light crude closed at $66.86.
The rare disappointment from Dell sent its stock sharply lower and sparked selling in other tech stocks. Its second-quarter revenue was nearly $300 million below analysts' forecast, and its third-quarter outlook was also well below projections. And McDonald's fell after soaring Thursday on speculation a real estate company is eyeing its store locations and other property.
The Dow Jones industrial average dropped 85.58, or 0.80 percent, to 10,600.31.
Broader stock indicators also sagged. The Standard & Poor's 500-stock index fell 7.42, or 0.60 percent, to 1230.39, and the tech-focused Nasdaq composite index dropped 17.65, or 0.8 percent, to 2156.90.
The major indexes ended the week mixed. The Dow closed the week up 0.40 percent, the S&P 500 rose 0.32 percent and the Nasdaq dropped 0.96 percent.
The market has been watching oil prices obsessively, afraid that higher energy costs could lower consumer spending and increase business expenses. The fear is that higher oil prices, coupled with the Fed's streak of interest rate hikes, could plunge the economy into a recession.
Dell fell $2.94, to $36.64, as Goldman Sachs Group downgraded the stock. Dell's chief executive said the falling prices of low-end computers have hurt revenue, and the company has been too aggressive in markdowns.
Whirlpool rose $3.70, to $84.40, after reports said Maytag had agreed to its purchase offer. Maytag rose 22 cents, to $19.01.
British Airways fell 16 cents, to $52.67, on the heels of a labor dispute that disrupted travel.
Knight Ridder, the nation's second-largest newspaper chain, rose $3.39, to $65.75, after announcing plans to buy back 10 million shares of its stock as a way to boost the value of remaining shares.
New York Stock Exchange composite index fell 32.50, to 7558.33.
American Stock Exchange index fell 7.15, to 1637.33.
Russell 2000 index of smaller-company stocks fell 6.37, to 660.00.
NYSE: 1.71 billion shares, down from 1.93 billion on Thursday. Decliners outnumbered advancers 8 to 5.
Nasdaq: 1.64 billion shares, up from 1.56 billion. Decliners outnumbered advancers 7 to 4.
Light, sweet crude oil for September delivery: $66.86, up $1.06.
Gold for current delivery: $445.90 a troy ounce, up from $445.50 on Thursday.