The tailspin in U.S. stocks continued for a second week as the price of oil jumped to a three-month high and investors prepared for disappointing earnings from banks and technology companies.
Financial shares led the retreat after Wells Fargo & Co. and U.S. Bancorp, two of the country's six largest banks, said earnings rose at the slowest pace in four years. Intel Corp., International Business Machines Corp. and Yahoo Inc. dropped after reporting quarterly results.
Continental Airlines reported that it lost $43 million, or 53 cents per share, versus $208 million, or $3.16 per share, for the fourth quarter last year.
"People are preparing for some earnings weakness as the numbers start to roll in," said Timothy Heekin, head of trading at Thomas Weisel Partners in San Francisco. More than 70 members of the Standard & Poor's 500 index are due to report this week.
The Dow Jones industrial average decreased 63.55, or 0.6 percent, to 10,896.32, led by American International Group Inc., the world's largest insurer.
Broader stock indicators also dropped. The Standard & Poor's 500 index fell 4.68, or 0.36 percent, to 1,282.93, and the Nasdaq composite index lost 14.35, or 0.62 percent, to 2,302.69.
The Sun-Bloomberg Index of Maryland stocks fell 2.31, or 0.7 percent, to 334.28. Leading the downward movement were Jos. A. Bank Clothiers Inc., which fell $1.37 to $46.82, and Laureate Education Inc., which shed $1.21 to $53.
"Right now the energy prices do represent a head wind for the market," said Chip Dickson, chief U.S. strategist at Lehman Brothers Inc. in New York. "We still think energy is a good place to be."
More than 13 stocks fell for every six that rose on the New York Stock Exchange. About 1.65 billion shares changed hands on the Big Board, 2.4 percent more than the three-month average.
Overseas, Britain's FTSE 100 fell 0.72 percent; Germany's DAX index lost 0.99 percent; France's CAC-40 dropped 1.01 percent; and Japan's Nikkei index declined 1.07 percent.
The Associated Press contributed to this article.
Stock of interest
Exxon Mobil Corp.
The world's No. 1 publicly traded oil company, rose 57 cents to $61.54. Overall, energy companies rose 2 percent, the most of the 10 groups in the S&P 500 as oil prices spiked.