US stocks fell on Wednesday as record crude oil prices and comments from the Federal Reserve fuelled concerns about inflation and cutbacks in non-essential consumer spending. The Federal Reserve warned of higher inflation and unemployment and lowered its economic growth forecast for 2008.
The US central bank also signalled it was unlikely to cut interest rates again. Further adding to oil-related jitters were comments from airplane maker Boeing's chief executive that he was concerned record oil prices are crimping airlines' growth.
Shares of Boeing fell 3.6 percent to $82.02 and were the biggest drag on the Dow Jones industrials. The comments came hours after AMR Corp's American Airlines announced it would slash domestic capacity in the face of soaring fuel prices.
An index of airline stocks slid 10.9 percent. Apart from airlines, retailers, home builders and financial services stocks also lost ground. The Dow Jones industrial average slid 210.55 points, or 1.64 percent, to 12,618.13, while the Standard & Poor's 500 Index fell 18.78 points, or 1.33 percent, to 1,394.62. The Nasdaq Composite Index was down 40.14 points, or 1.61 percent, at 2,452.12.