( dpa ) - US stocks dropped Wednesday as record high oil prices and a record low dollar helped erase strong gains made the day before.
Crude oil rose above 110 dollars per barrel in New York trading and the dollar continued its weeks-long decline against the euro. The US currency has fallen 3.5 per cent since February 26, Bloomberg News reported.
Financial stocks fell one day after the US Federal Reserve said it would offer up to 200 billion dollars in loans to banks struggling with record foreclosure rates, in an effort to keep the US economy out of a recession.
Merrill Lynch & Co and Goldman Sachs said Wednesday the Fed plan may not be enough to pull banks out of the credit crisis and halt lenders from freezing new mortgages.
The blue-chip Dow Jones Industrial Average dropped 46.57 points, or 0.38 per cent, to 12,110.24. The broader S& P 500 Index climbed was down 11.88 points, or 0.90 per cent, to 1,308.77. The high-tech NASDAQ composite index lost 11.89 points, or 0.53 per cent, to 2,243.87.
The three major stock indices climbed nearly 4 per cent on Tuesday, the largest one-day jump in at least five years on the Fed's new rescue plan.
The US currency reached a new record low against the euro of 64.29 euro cents from 65.20 euro cents on Tuesday, and against the Japanese currency to 101.53 yen from 103.45 yen.
Gold prices gained 5.15 dollars to 980.50 dollars per fine ounce.