Stocks slid on Wednesday as fears of more credit losses and mortgage defaults sunk shares of financial services companies, while worries about the impact of near record crude oil prices hit retailers and shares of big manufacturers.

Shares of JPMorgan Chase & Co, the No. 3 U.S. bank, led losers on the Dow, with a drop of more than 1 percent, while shares of diversified manufacturer General Electric, led losses on the S&P 500, down 1.2 percent.

There's a constant state of heightened concern about more write-offs and what that would mean in terms of lending policies, said Steve Goldman, market strategist at Weeden & Co. in Greenwich, Connecticut.

Will there be a freeze in the credit markets and will that in turn hurt the economy? Those are the concerns.

The Dow Jones industrial average was down 119.08 points, or 0.92 percent, at 12,891.06. The Standard & Poor's 500 Index was down 14.26 points, or 0.99 percent, at 1,425.44. The Nasdaq Composite Index was down 28.29 points, or 1.09 percent, at 2,568.52.

JPMorgan shares declined 1.4 percent to $41.06 on the New York Stock Exchange, while shares of GE declined 1.2 percent to $37.60.

Shares of Freddie Mac fell 3.2 percent to $25.89, a day after the No. 2 U.S. mortgage finance company posted a $2 billion loss for the third quarter. Several brokerages cut their price targets on the stock.

Among retailer, shares of Wal-Mart Stores Inc declined 1.4 percent to $44.88.

U.S. crude for January delivery was little changed in New York after hitting a record of $99.29 in overnight trading.

Investors will look for clues about the economic outlook in the final Reuters/University of Michigan consumer sentiment index, due at 10 a.m.

U.S. Treasury Secretary Henry Paulson said the number of potential U.S. home-loan defaults will be significantly bigger in 2008 than in 2007, the Wall Street Journal's online edition reported.

(Editing by Kenneth Barry)