Oil sets new high, US stocks tumble

U.S. stocks tumbled to new lows for the year on Thursday after a disappointing earnings and outlook from technology bellwether Hewlett-Packard Co. and record oil prices jolted confidence.

Mixed economic data muddied the picture as retail sales data showed shoppers still trying to cope with higher energy prices and stagnant wage growth.

The combination of bad news sent the Nasdaq to its lowest close since Aug. 18, 2003, while the Standard & Poor's 500 closed at its lowest level since Dec. 10, 2003. The Dow Jones Industrial Average also hit a new low for the year, notching its lowest close since Nov. 28, 2003.

"We are seeing the cumulative effect of Hewlett-Packard, higher oil, higher rates, not such a great third-quarter outlook for companies and then the general economic numbers," said Brian Williamson, vice president of equity trading at The Boston Co. Asset Management.

The Dow Jones industrial average ended down 123.73 points, or 1.24 percent, at 9,814.59. The Standard & Poor's 500 Index fell 12.56 points, or 1.17 percent, at 1,063.23. The technology-laced Nasdaq Composite Index lost 29.93 points, or 1.68 percent, at 1,752.49.

Oil closed at a new high of $45.50 a barrel as fighting in Iraq, a setback for Russia's biggest oil exporter and storms threatening production in the Gulf of Mexico all combined to raise concerns about fuel supplies, reports Reuters.com

According to CNN.com oil prices backed away from the records set Thursday in overnight trading. U.S. crude futures fell 10 cents to $45.40 a barrel in electronic trading, after reaching a record $45.75 Thursday. Brent oil futures slipped 9 cents to $42.20 a barrel in London.

The surge in oil prices and Hewlett-Packard's early earnings disappointment sent stocks reeling Thursday for the second straight day. The Dow fell 1.2 percent, while the Nasdaq composite index was 1.7 percent lower.

The Dow goes into the week's final session down just three-quarters of a point. The Nasdaq has a tougher road to a gain -- it's more than 24 points lower.