A sharp rise in oil prices sent stocks down Wednesday as investors considered new figures showing that high energy prices have started to slow the economy. Profit-taking in the technology sector also weighed heavily on the markets.
Crude futures surged as refinery recovery remained sluggish on the Gulf Coast and the government announced a sharp drawdown in the nation's oil reserves.
Wall Street also was concerned with nearly flat industrial output figures from the Federal Reserve -- due to the approach of Hurricane Katrina -- and a 2.1 percent drop in retail sales. However, the Commerce Department noted that with auto sales removed, retail sales rose 1 percent, though much of that was due to higher gasoline prices.
The market's losses were magnified by light trading volume.
The tech-focused Nasdaq composite index fell 22.42, or 1 percent, to 2149.33. The Dow Jones industrial average fell 52.54, or 0.5 percent, to 10,544.90, while the Standard & Poor's 500-stock index slid 4.04, or 0.3 percent, to 1227.16.
Wal-Mart fell 37 cents, to $44.70. Smaller competitor Target dropped $1.44, to $52.75. Federated Department Stores declined $2, to $65.77. A measure of retailers in the S&P 500 fell 1.3 percent for the second-worst performance among two dozen industry groups.
Exxon Mobil rose 60 cents, to $62.47, as energy companies had the biggest jump among the S&P 500's industry groups, rising 1.1 percent. ConocoPhillips gained $1.28, to $67.48.
Baidu.com, the Chinese Internet search engine, fell $32.27, or 28.4 percent, to $81.32, after Goldman Sachs and Piper Jaffray each initiated coverage of the stock with "underperform" ratings. Other Internet stocks also fell, with Google dropping $8.68, to $303, and Yahoo declining 50 cents, to $33.80.
Lehman Brothers rose 13 cents, to $112.41, after the Wall Street firm reported a 77 percent increase in third-quarter profit, attributed to record revenue in its investment banking and investment management segments.
New York Stock Exchange composite index fell 0.96, to 7577.29.
American Stock Exchange index rose 18.55, to 1708.88.
Russell 2000 index of smaller-company stocks fell 6.78, to 666.35.
NYSE: 1.98 billion shares, down from 2.08 billion on Tuesday. Decliners outnumbered advancers 5 to 3.
Nasdaq: 1.71 billion shares, down from 1.76 billion. Decliners outnumbered advancers 2 to 1.
Crude oil for October delivery: $65.09, up $1.98.
Gold for current delivery: $449.80 a troy ounce, up from $446.10 on Tuesday.