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US sharemarkets fell on Wednesday as oil rocketed to a new record over US$133 per barrel over supply fears and the Federal Reserve forecast dramatically slower economic growth for the rest of the year.
At the close of trading on Wednesday, the Dow Jones industrial average lost 227.49 points, or 1.77 percent, to close at 12,601.19, while the broader Standard & Poor's 500 index fell 22.69 points, or 1.61 percent, to close at 1,390.71.
The technology-based Nasdaq composite 43.99 points, or 1.77 percent, to close at 2,448.27.
Shares were down in the morning as the price of US light crude oil for July delivery set yet another closing record, rising over US$4 per barrel to finish at US$133.17 on the New York Mercantile Exchange.
The downturn was exacerbated in the early afternoon following the release of a gloomy report from the Federal Reserve that revised downward its earlier estimate based on continuing housing and credit crunches, soaring energy prices and worsening unemployment.
Financial shares were again among the biggest losers on the Dow, with American Express Citigroup and JP Morgan Chase falling for a second day.
Shares in AMR, the parent company of the world's biggest carrier, American Airlines, fell 12 percent after announcing the airline is cutting dometic flights and jobs in response to soaring fuel prices and falling demand.
Market breadth was negative. On the New York Stock Exchange, losers topped winners two to one on volume of 930 million shares, while on the Nasdaq, decliners beat advancers five to two on volume of 1.62 billion shares.
(c) NewsRoom 2008
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