Tumbling demand for commodities and a drop in the euro led to a broad stock sell-off Wednesday that pulled the Dow Jones industrial average down 130 points.
Demand for gasoline in the U.S. fell by the largest amount in seven weeks, the Energy Information Administration said, a signal that consumers are conserving money as gas prices near a national average of $4 a gallon. Gas futures fell almost 8 percent. Crude oil fell back below $100 a barrel, a loss of more than 4 percent.
Fewer fill-ups may be an early sign of a broader drop in consumer and business spending as customers forgo trips to malls and restaurants and companies ship fewer products. That, in turn, could lead to lower corporate earnings and halt a stock rally that has sent the stock market up 7 percent this year.
"People are becoming more conservative in their outlook and their spending as oil prices have risen, and that's making the market become more concerned about growth," said Quincy Krosby, the chief strategist at Prudential Financial.
The fall in demand for gas means that traders will take a close look at Thursday's weekly report on first-time applications for unemployment benefits. If they rise, that could indicate companies are cutting back in other areas as well, Krosby said. Stocks rose broadly on Friday after a report that companies added more than 200,000 jobs in April.
Stocks fell broadly, with energy and materials companies suffering the worst declines. The Dow lost 1 percent to close at 12,630.03. The S&P 500 fell 15.08, or 1.1 percent, to 1,342.08. The Nasdaq composite lost 26.83, or 0.9 percent, to 2,845.06.
The market's broad sell off, which sent all 10 industry groups in the S&P 500 index lower, is a sign that the economic recovery still seems uncertain at times. Strong earnings have been carrying the market higher since the beginning of 2011. On Tuesday the S&P 500 climbed for the third straight day to within 0.5 percent of its highest close for the year.
"Every time that stocks start to go down a little bit, you're seeing more selling pile on because people have made so much profit over the past 9 months," said Uri Landesman, president of Platinum Partners, a New York-based hedge fund.
The market's losses accelerated shortly before noon Wednesday. The dollar and government bond prices rose as traders moved money into safer assets. The dollar rose 0.8 percent against a group of other major currencies. The euro dropped 1.5 percent against the dollar.
The yield on the 10-year Treasury note fell to 3.16 percent from 3.22 percent late Tuesday. Bond yields fall when their prices rise.
Energy stocks fell 3 percent, the most of any of the 10 industries in the S&P 500 index. Denbury Resources Inc. and Cabot Oil & Gas Corp. both fell more than 4 percent.
Materials producers also struggled after metals prices sank. Freeport McMoRan Copper & Gold Inc., a miner, fell 5.6 percent. Copper fell 3.2 percent, and silver lost 7.7 percent. Silver fell sharply last week as part of a sell-off in commodities.
Commodities are still more expensive than they were a year ago. High oil prices helped push the nation's trade deficit up 6 percent to $48.2 billion in March from February. U.S. companies sold more automobiles and other goods and services to customers abroad, but it wasn't enough to make up for an 18 percent rise in oil imports.
Disney's results late Tuesday fell short of expectations, and its stock fell 54 percent, the most of the 30 stocks that make up the Dow. The earthquake that struck Japan in March cut into revenues at its theme parks there, and its movie studio profits took a hit from the box-office bomb "Mars Needs Moms."
Macy's Inc. was among the few companies that rose. The company jumped 7.7 percent after its earnings blew past expectations. The parent of Macy's and Bloomingdale's department stores said its first-quarter net income more than quintupled to $131 million from $23 million. The company raised its forecast for full-year earnings and doubled its quarterly dividend to 10 cents.
American International Group Inc. rose 3.5 percent after the government said it would sell 200 million of the 1.66 billion shares in the insurer that it owns to the public. The Treasury Department owns 92 percent of AIG after the company got bailed out during the financial crisis.
Intel Corp. rose 1.6 percent after the chip maker increased its quarterly dividend to 21 cents from 16 cents.
Three stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to 3.8 billion shares.