Stocks tumbled for a third day and energy prices surged as Hurricane Rita threatened to disrupt oil production in the Gulf of Mexico, the nation's biggest source of fuel.
Retailers such as Sears Holdings extended their longest losing streak in six months. Avon Products' shares declined after the company cut its 2005 profit forecast, partly because of Hurricane Katrina and higher energy costs.
"Until we get out of hurricane season, where we have these weather-related risks to gasoline prices, oil is going to be in the front of everyone's mind as a driver of the market," said Janna Sampson, who helps manage $1.3 billion for Oakbrook Investments in Lisle, Ill.
The Standard & Poor's 500-stock index fell 11.14, or 0.9 percent, to 1210.20. It has slumped 2.2 percent over the past three days, the biggest such loss in five months. The Dow Jones industrial average dropped 103.49, or 1 percent, to 10,378.03. The Nasdaq composite index slid 24.69, or 1.2 percent, to 2106.64.
The estimated $100 billion in damages from Katrina prompted economists to reduce their growth forecasts. They now expect third-quarter economic expansion of 3.6 percent, followed by 3.1 percent in the final three months, based on a Bloomberg News survey. That's down from 4.1 percent and 3.5 percent, respectively, before the storm.
Sears, owner of the largest U.S. chain of department stores, fell $4.41, to $115.15. The S&P 500 index of retailers dropped 1.3 percent in its seventh straight decline, the longest string of losses since March. Kohl's declined $1.68, to $48.22.
Wal-Mart Stores fell 72 cents, to $42.49, its lowest close since August 1999. Avon, the No. 1 direct seller of cosmetics, slumped $3.60, or 11.8 percent, to $27, for the second-biggest loss in the S&P 500.
Valero Energy, the biggest U.S. oil refiner, rallied $3.94, to $113.14, as an index of energy companies rose 1.2 percent, to a record. Sunoco gained $3.35, to $78.10.
FedEx climbed $6.15, or 8 percent, to $83.15, for the second-biggest increase in the S&P 500, as first-quarter profit exceeded analysts' estimates.
New York Stock Exchange composite index fell 47.82, to 7515.02.
American Stock Exchange index rose 9.19, to 1731.43.
Russell 2000 index of smaller-company stocks fell 10.69, to 649.94.
NYSE: 2.55 billion shares, up from 2.31 billion on Tuesday. Decliners outnumbered advancers 2 to 1.
Nasdaq: 1.8 billion shares, down from 1.88 billion. Decliners outnumbered advancers 3 to 1.
Crude oil for November delivery: $66.80, up 60 cents.
Gold for current delivery: $468.90 a troy ounce, up from $466.20 on Tuesday.