New York — Slammed hard by the soaring price of crude-oil futures, which closed Friday at a new record high, and a rise in the jobless rate, U.S. stocks more than wiped out weekly gains, with the Dow chalking up the eighth-largest point drop in the blue-chip index's history.
"It looks crazy because we've had such a low unemployment rate for the past three years. But it's all about the oil, and today was not a pretty ride," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average fell 394.64 points, or 3.1 percent, to 12,209.81 on Friday, giving the index a weekly loss of 3.5 percent.
The Dow's decline, which left all 30 of its components in the red, was the heaviest hit in terms of points lost since Feb. 27, 2007, when the index fell 416.02 points.
The S&P; 500 fell 43.36 points, or 3.1 percent, to 1,360.69, leaving it down 2.9 percent for the week. Leading the declines were financials, off 4.8 percent, and consumer discretionaries, down 4.3 percent.
The technology-dominated Nasdaq Composite shed 75.38 points, or 3 percent, to 2,474.56 for a weekly decline of 1.9 percent.
The major indexes were prepped for an opening drop by the Labor Department's pre-open report that the unemployment rate in May rose to 5.5 percent. Economists had forecast a far smaller 0.1 percentage point gain in the unemployment rate, to 5.1 percent.
But the skyrocketing price of crude-oil proved to be the stock's market's major undoing.
Helping trigger the surge in crude was the dollar's decline, which fell sharply one day after the European Central Bank opted to leave its key lending rate unchanged at 4 percent.
Crude futures reached a record of $139.01 in electronic trading on Globex, an all-time high for a front-month future contract, while July crude climbed $10.75, or 8.4 percent, to end at $138.54 a barrel on the New York Mercantile Exchange and climbed as high as $138.80 earlier on.
On Thursday, crude futures bounced off a key support level of $122 a barrel, but the bounce was "a bounce with steroids," said Phil Orlando, equity market strategist at Federated Investors.
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