Stocks have suffered steep losses as oil prices surged, renewing worries that higher fuel prices could hobble the economic recovery.
Oil rose 2.66 dollars to settle at 99.63 dollars a barrel amid unrest in Iran and Libya.
Iran clamped down on anti-government protesters and forces loyal to Libya’s leader Muammar Gaddafi launched counter-attacks against rebels expanding control over the country.
Prices jumped 13 % last week with a rise in turmoil across North Africa and the Middle East. That pushed petrol prices up 20 cents per gallon. As a result, Americans are now paying roughly 75 million dollars more per day to fill their petrol tanks than a week ago.
Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that a sustained increase in crude prices could pose a risk to the recovery. But he predicted only a temporary increase in inflation, not runaway prices. The Fed chief also said he expected the economy to grow this year, although not enough to lower the 9 % unemployment rate.
The Commerce Department reported that builders began work on fewer homes, offices and commercial projects in January. The annual rate was near its decade low, set in August.
The Dow Jones industrial average lost 168.32 points, or 1.4%, to 12,058.02. The Standard & Poor’s 500 index fell 20.89, or 1.6%, to 1,306.33. The Nasdaq composite fell 44.86, or 1.6%, to 2,737.41.
Three stocks fell for every one that rose on the New York Stock Exchange. Trading volume came to 1.2 billion shares.
Fifth Third Bancorp dropped 4.5% after the regional bank said that the Securities and Exchange Commission was investigating its accounting and reporting of commercial loans.
Natural gas driller Range Resources lost 7% after the company’s fourth-quarter revenue figures came in below analysts’ expectations. Natural gas prices have been in a slump for the past year as a result of an oversupply in the market.
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