Stocks drop after new record for oil prices

NEW YORK -- Wall Street resumed its sell-off Wednesday after oil hit a new record and a bearish analyst report renewed concerns that General Motors Corp. could run out of cash.

The stock market's pullback, which accelerated in the final hours of the week's last full trading day, left the Dow Jones industrial average officially in bear market territory, with the blue chips having fallen more than 20 percent from their October highs.

Oil surged to new records above $144 a barrel as the government reported a bigger-than-expected drop in U.S. supplies and as investors worried about tensions in the Middle East.

Worries that GM could go so far as to declare bankruptcy only added to investors' worries. The stock fell to its lowest level since September 1954 as investors shrugged off better-than-expected sales figures from June and worried about the company's cash needs.

According to preliminary calculations, the Dow fell 166.75, or 1.46 percent, to 11,215.51, the lowest close since August 2006.

Broader stock indicators also posted big losses after showing gains for much of the morning. The Standard & Poor's 500 index fell 23.39, or 1.82 percent, to 1,261.52, and the technology-laden Nasdaq composite index fell 53.51, or 2.32 percent, to 2,251.46.

The S&P is just shy of the 20 percent pullback that signals a bear market. While the Nasdaq is also in bear market territory, it hit that mark in March, moved higher and has now returned to a bear level.