Stocks skidded Tuesday in the aftermath of Hurricane Katrina, which pounded hotels and casinos, constricted oil refinery capacity and left insurers to cover huge losses.
While major indexes gained Monday when the storm weakened, Wall Street's spirits sank Tuesday after the nation's top disaster relief official called the hurricane "catastrophic," oil prices climbed and stocks in affected sectors continued to drop. The Dow Jones industrial average was down more than 100 points before losses narrowed toward the close.
Crude oil futures hit new highs on fears that already tight refinery capacity would be further constrained as reports asserted widespread refinery shutdowns along the Gulf Coast.
Notes released from the Federal Reserve's last policymaker meeting further aggravated equity investors. The notes said inflation had "ticked up" since the policymakers' previous meeting.
The Dow closed down 50.23, or 0.48 percent, at 10,412.82.
Broader stock indicators also dropped. The Standard & Poor's 500-stock index fell 3.87, or 0.32 percent, to 1208.41, and the Nasdaq composite index fell 7.89, or 0.37 percent, to 2129.76.
Bonds soared on higher oil prices, the Fed's notes and stocks' declines, with the yield on the 10-year Treasury note down to 4.10 percent, from 4.17 percent late Monday.
Natural gas prices climbed as companies with a Gulf Coast presence said they had either shut down or cut back operations there. The increases in energy costs and commodity prices sparked inflation fears.
Insurance stocks sagged again, and oil companies continued to trade higher. Some gaming stocks fell again as casino operators assessed the damage to their Gulf Coast properties.
Capri Casinos fell 65 cents, to $22.87, and Pinnacle Entertainment fell 72 cents, to $21.35.
Allstate fell 54 cents, to $56.64, and MetLife fell 43 cents to $48.69.
Chevron rose $1.03, to $60.54. ConocoPhillips rose $1.34, to $64.41. Valero Energy rose $4.91, to $96.79.
New York Stock Exchange composite index fell 16.92, to 7397.06.
American Stock Exchange index rose 3.54, to 1623.99.
Russell 2000 index of smaller-company stocks rose 0.93, to 656.25.
NYSE: 1.9 billion shares, up from 1.59 billion on Monday. Decliners outnumbered advancers 9 to 7.
Nasdaq: 1.25 billion shares, down from 1.27 billion. Decliners outnumbered advancers 3 to 2.
Crude oil for October delivery: $69.81, up $2.61.
Gold for current delivery: $431.20 a troy ounce, down from $437 on Monday.