Wall Street in the dumps

  NEW YORK  _ Wall Street tumbled Wednesday as the price of a
barrel of oil surged soared to a record near $124 and touched off
concerns that the stock market's recent gains might have been
premature while consumers grapple with rising energy and food
costs. The Dow Jones industrial average fell more than 200 points.
    Sharp gains in commodities prices have drawn fresh attention
from investors worried that consumers _ the lifeblood of the U.S.
economy _ will be forced to pare discretionary spending to keep up
with increasing costs for necessities.
    Oil prices have doubled over the past year, causing gasoline
prices to surge further into record terrain and strap consumers,
who drive more than two-thirds of economic activity, with yet
another financial burden.
    Wall Street slid Wednesday amid a cacophony of worries about the
effects of rising prices. Kansas City Federal Reserve President
Thomas Hoenig in a speech late Tuesday pointed to inflation as his
main concern. Treasury Secretary Henry Paulson said in an interview
with The Associated Press Wednesday that while the worst of the
credit crisis might have passed, rising gas prices will dampen the
benefits from the 130 million economic stimulus checks that the
government is distributing.
    While some investors say recent stock market gains had come too
quickly anyway, others say the market's declines reflect more
serious worries about the difficulties blanketing consumers.
    Ed Peters, chief investment officer at PanAgora Asset Management
in Boston, said, ``It is going to be a drag if we continue to get
rising prices. The oil prices is just symptomatic of a broader
trend.''
    But Stephen Carl, head of equity trading at The Williams Capital
Group, said that while rising oil prices appeared to rattle
investors, many had also seen sizable gains from stocks in recent
weeks and wanted to preserve their profits.
    ``Perhaps we fall away here for a few sessions,'' he said the
S&P 500's rebound to the 1,400 level might have been too hasty for
some investors.
    According to preliminary calculations, the Dow fell 206.48, or
1.59 percent, to 12,814.35, after fluctuating early in the session.
    Broader stock indicators also declined. The Standard & Poor's
500 index fell 25.69, or 1.81 percent, to 1,392.57, and the Nasdaq
composite index fell 44.82, or 1.80 percent, to 2,438.49.