U.S. stocks fell on Friday to a three month low as the oil price continued to rise following increased violence in the Middle East and more trouble persisted in the financial sector.

Just a day after the Dow broke its three-day losing streak, stocks making a triple-digit dive minutes after the start of trading.

The Dow Jones Industrial Average dropped 181.16, or 1.5 percent, to 11,881.93 at 1:39 p.m. in New York. The S&P 500 lost 20.98, or 1.6 percent, to 1,321.85. The Nasdaq Composite Index slid 57.06, or 2.3 percent, to 2,405.

Ford, the second-largest U.S. automaker, dropped 7 percent to $5.88 after announcing automotive losses will worsen as demand for pickups and sport-utility vehicles lowered.

Ford's efforts to recover from $15.3 billion in losses in the past two years are being hindered by plunging truck sales as gasoline prices exceed $4 a gallon.

Crude oil for July delivery rose $3.01, or 2.3 percent, to $134.94 a barrel in New York as the weaker dollar enhanced the appeal of commodities as a currency hedge.

General Motors was the biggest decliner on the Dow in recent trading after Lehman Brothers predicted the auto maker will have to write down $1.5 billion. Shares were recently down 85 cents or 5.7 percent at $13.94.

Winnebago plunged more than 5 percent after the company posted a 73% decline in third-quarter profit. The motor home manufacturer earned 10 cents per share on a 40% drop in sales. Analysts polled by Thomson Reuters estimated just 3 cents in earnings but higher sales of $157.6 million. Shares were down $1.26 or 9.8 percent at $11.56.

Citigroup Inc., the biggest U.S. bank said yesterday that it will post more writedowns from subprime-infected investments, lost 4.4 percent to $19.27.