NEW YORK -- Wall Street tumbled Thursday as further troubles in the financial sector, higher unemployment, a rebound in oil prices and lackluster retail sales touched off fresh concerns about the economy. The Dow Jones industrials skidded nearly 225 points, while bond prices shot higher as investors once again sought the safety of government debt.

The stock market's pullback erased most of the 370-point gain the Dow logged the prior two sessions and shows the lack of solid conviction behind many of investors' recent bets.

Oil prices jumped back above $120 a barrel, halting a steep three- day slide after Kurdish rebels claimed responsibility for a fire at a key Turkish pipeline that supplies Western countries.

Light, sweet crude for September delivery rose $1.44 to settle at $120.02 a barrel on the New York Mercantile Exchange.

Crude had tumbled more than $6 over the previous three days, bringing prices $30 lower than its July high above $147 a barrel.

Heading the list of Wall Street worries, insurer American International Group Inc. reported a loss of more than $5 billion for the second quarter. AIG proceeded to fall fell $5.25, or 18 percent, to $23.84 after it said weakness in the credit markets has erased several billions of dollars in value from its credit default swaps portfolio and other investments. The stock was by far the steepest decliner among the 30 that make up the Dow industrials.

The Dow fell 224.64, or 1.93 percent, to 11,431.43. It was the blue-chip index's sixth triple-digit move in the past two weeks.

Broader indicators also slid. The Standard & Poor's 500 index fell 23.12, or 1.79 percent, to 1,266.07, and the Nasdaq composite index fell 22.64, or 0.95 percent, to 2,355.73.

The yield on the benchmark 10-year Treasury note, which moves opposite its prices, fell to 3.93 percent from 4.05 percent late Wednesday. The dollar mostly rose against other major currencies, while gold prices fell.

The Labor Department said the number of newly laid off people seeking jobless benefits increased by a seasonally adjusted 7,000 to 455,000 last week, the highest level since late March 2002. And weak sales reports from Wal-Mart Stores Inc. and other retailers added to investors' unease.

Stocks briefly pulled off their lows in the session after the National Association of Realtors said its seasonally adjusted index of pending sales for existing homes rose 5.3 percent in June from May, rather than declining as economists had expected.

Originally published by TIM PARADIS Associated Press.

(c) 2008 Tulsa World. Provided by ProQuest Information and Learning. All rights Reserved.

Story Source: Tulsa World