NEW YORK - Stocks fell to the year's lows after a bombshell earnings' warning from retailer Home Depot and increasing Middle East violence hit an already jittery Wall Street.
"This market is not in a strong enough state to handle shocks from bad news," said Ed Peters, chief investment-strategist and director
of asset allocation at PanAgora Asset Management.
The Dow Jones fell 379.21 points to close at 10,034.58 - its fifth-highest points slide ever and its lowest close since March 14.
The battered Home Depot, Wall Street house JP Morgan and computer maker IBM accounted for more than half the Dow's fall.
Wall Street had been swamped by fears that high oil prices, a slowing US economy and a weak European single currency would depress corporate America's earnings.
In the latest shock to jittery investors, oil prices rose to almost decade highs amid panic buying sparked by fears of disruptions to the flow of crude oil from the Middle East.
The Dow moved close to breaching the psychologically important 10,000, which it had not dropped below since the middle of March.
The downward move on Wall Street and a fresh rise for oil prices dealt a double blow to British shares, eradicating an early rise for the FTSE to an almost five-month low.
"There is a lot of nervousness around and the oil price has simply shot up, which simply makes everybody shudder," said a senior equity salesman.
"It's teetering on the edge. The market desperately needs some good news and at the moment I don't know where it's going to find it."
British Airways bore the brunt of the oil rise, with a drop of 7.3 per cent.
