U.S. stocks fell on Friday, pushing the market to its first weekly drop in a month, as oil soared past $126 a barrel and metal producers retreated on concern the surge in commodity prices will end.
Finance sector revealed more leaks with American International Group Inc. after the company said it plans to raise $12.5 billion to cover write downs renewed concern more losses are coming in the financial industry. Meanwhile, Citigroup Inc. unveiled plans to shed about half a trillion dollars in assets.
Freeport-McMoRan Copper & Gold Inc. dropped after rising copper stockpiles signaled demand from China is slowing.
As of 2:06 p.m. EST, the Dow Jones Industrial Average slid 126.44 points, or 0.98 percent to 12,740.34, the Standard & Poor's 500 index lost 9.97 points, or 0.71 percent, to 1,387.71 and the Nasdaq Composite Index fell 6.70 points, or 0.27 percent, to 2,444.54.
Oil futures, climbed past $126 a barrel Friday amid geopolitical and supply fears and are onto score a weekly gain of more than 7 percent.
AIG, the world's largest insurer reported a first-quarter net loss of $7.81 billion, compared with earnings of $4.13 billion a year earlier. The company wrote down contracts it had sold to protect investors by $9.11 billion in the quarter to comply with rules that require the company to estimate their present market value.
Standard & Poor's and Fitch Ratings cut the company's credit grades after the announcement. AIG shares lost 8.3 percent to $40.48.
Citigroup fell 1.4 percent to $23.96 after announcing it will reduce about $400 billion in non-core assets over the next three years, as the largest U.S. bank seeks to boost efficiency and increase profit.
Freeport, the world's second-largest copper producer, dropped 3.8 percent to $113.60 Copper headed for a second weekly drop as rising stockpiles indicated China, the world's largest user, slowed purchases because of near-record prices.
Exxon Mobil, the largest U.S. energy company, slid 1.8 percent to $88.34.
Ford fell 1.6 percent after Kirk Kerkorian's Tracinda Corp. said it began its previously announced purchase of up to 20 million shares of the auto maker. The purchase for $8.50 per share is at a 13 percent premium to the stock's price when the deal was first announced last month. Tracinda will now own 5.5 percent of Ford's outstanding common stock.