WASHINGTON (dpa-AFX) - After coming under pressure early in the session, stocks saw continued weakness throughout the trading day on Wednesday. The major averages closed lower for the third consecutive session, with the Dow falling to its lowest closing level in over a month.
The major averages ended the day off their lows of the session but still in negative territory. The Dow slid 405.41 points or 0.8 percent to 52,380.66, the Nasdaq declined 168.07 points or 0.6 percent to 26,253.34 and the S&P 500 fell 37.16 points or 0.5 percent to 7,636.36.
The continued weakness on Wall Street came amid an extended surge by the price of crude oil, with U.S. crude oil futures spiking nearly 4 percent.
The international benchmark brent crude futures have also topped $100 a barrel for the first time since July.
The jump in crude oil prices comes as U.S. forces destroyed five Iranian crude oil carriers after the Islamic Revolutionary Guard Corps targeted a U.S. Navy warship with ballistic missiles.
U.S. Central Command said Iran has used the tankers as part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies.
Iran retaliated by launching a barrage of missiles targeting U.S. military positions in Jordan, raising fears of a wider regional conflict.
The sharp increase in crude oil prices has led to renewed concerns about the outlook for inflation ahead of the Federal Reserve's monetary policy meeting next week.
'Brent crude pushing above $100 a barrel has had a psychological effect on the market, pushing a hypothetical inflation worry gauge to 'serious' status and dragging down financial assets,' said Dan Coatsworth, head of markets at AJ Bell.
'The oil price has now jumped by 28% since early August,' he added. 'This type of ascent could leave businesses and consumers feeling sick at the thought of sharp cost increases and potentially higher borrowing costs if central banks choose to fight inflation with interest rate hikes.'
However, traders seemed somewhat reluctant to make more significant moves ahead of the release of key inflation data in the coming days.
Sector News
Despite the weakness shown by the broader markets, most of the major sectors ended the day showing only modest moves.
Retail stocks showed a significant move to the downside, however, with the Dow Jones U.S. Retail Index falling by 1.5 percent.
Considerable weakness was also visible among networking stocks, as reflected by the 1.4 percent loss posted by the NYSE Arca Networking Index.
Telecom, housing and transportation stocks also saw notable weakness, while oil and gold stocks moved higher along with the prices of their associated commodities.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Japan's Nikkei 225 Index dipped by 0.2 percent, while China's Shanghai Composite Index rose by 0.3 percent.
Meanwhile, the major European markets all moved to the downside on the day. The French CAC 40 Index plunged by 1.9 percent, the German DAX Index tumbled by 1.7 percent and the U.K.'s FTSE 100 Index slumped by 1.3 percent.
In the bond market, treasuries once again moved lower over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.1 basis points to 4.837 percent.
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