Discouraging words beat down stocks

A barrage of bad news including yet another record high for oil drove stocks sharply lower Thursday, hurtling the Dow Jones industrials down nearly 360 points to their lowest level in almost two years.

The market also worried about fresh signs of trouble in the financial, high-tech and automotive industries. Negative analyst comments sent shares of General Motors down $1.38, or 11%, to $11.43, their lowest point in more than three decades.

Oil futures shot past $140 after the head of the Organization of the Petroleum Exporting Countries predicted a barrel of crude could rise well above $150 this year and Libya said it might cut production.

The Dow sank 358.41 points, or 3%, to close at 11,453.42 -- its lowest finish since September 2006. The blue-chip index is now 19% below its record close last October of 14,164.53.

Broader stock indicators also fell sharply, although not to their mid-March lows. The Standard & Poor’s 500 fell 38.82 points, or 3%, to 1,283.15, and the Nasdaq composite slid 79.89, or 3.3%, to 2,321.37.

The Russell 2,000 index of smaller companies fell 17.88 points, or 2.5%, to 698.42.

Declining issues outnumbered advancers by about 6 to 1 on the New York Stock Exchange.

Government bond yields slid as investors rushed to buy Treasury obligations. The yield on the benchmark 10-year T-note fell to 4.04% from 4.1% late Wednesday.

The dollar slumped against other major currencies, while the price of gold, a hedge against inflation, jumped.

Oil was far from the only worrisome factor driving stocks lower.

Citigroup stock fell sharply after an analyst gave it a “sell” rating and warned investors to expect less from the brokerage sector in an uneasy economy. And disappointing forecasts from technology bellwethers Oracle and BlackBerry maker Research in Motion further soured investors’ moods and made the tech sector one of the steepest decliners.

Citigroup fell $1.18, or 6.3%, to $17.67, after Goldman downgraded it. Goldman also downgraded Merrill Lynch, which fell $2.41, or 6.8%, to $33.05.

The forecasts from Oracle and Research in Motion, meanwhile, dented the notion that tech companies might be better able to weather the economic downturn.

Oracle warned that the traditionally slow summer months could prove particularly slow this year. Research in Motion also issued a forecast that disappointed investors.

Oracle fell $1.13, or 5%, to $21.42; Research in Motion lost $18.88, or 13%, to $123.46.

Overseas, key stock indexes tumbled 2.6% in Britain, 2.4% in Germany and 2.4% in France.