Transportation stocks declined, led by Continental Airlines Inc., on concern that higher oil prices will crimp profit. Shares of retailers, including Federated Department Stores Inc., fell on the prospect that a rise in gasoline prices and an expected increase in interest rates will cause shoppers to spend less.

"People are wondering what these factors will do to the pace of the recovery and what it will do to consumer spending," said Bernie Myszkowski, chief equity officer for ABN Amro Asset Management in Chicago. "There will be some bumps along the way."

The S&P 500 has posted three consecutive weeks of losses and has declined 6.4 percent from its 2004 high on Feb. 11. The Nasdaq has dropped in five of the past six weeks and has retreated 13 percent from this year's high on Jan. 26.

Stocks also fell on foreign exchanges in response to the violence in the Middle East and to political and economic events in India and Japan.

"The market is redefining its lows," said Michael Palazzi, managing director of equity trading at SG Cowen Securities. "I thought we had hit our lows last week, keeping above Dow 10,000 and 1,900 on the Nasdaq, but with each new event in Iraq, we'll break new lows. And the inflationary effect of these higher oil prices won't help long-term."

In Turkey, bombs exploded outside four branches of British-owned bank HSBC Holdings Plc, on the eve of a visit by British Prime Minister Tony Blair. Crude oil rose 17 cents to $41.55 a barrel, the fourth straight record closing price.

India's main stock market index initially fell more than 15 percent yesterday, the biggest drop in its 129-year history, after a leftist coalition government was elected there. The markets finished the session down 11.1 percent after the government ordered state-run companies to heavily buy stock.

In addition to the international turmoil, the declines on Wall Street reflect concern that the surge in oil prices, coupled with rising interest rates, may slow profit growth. Analysts expect earnings for companies in the S&P 500 to increase 17.8 percent in the second quarter and 12.4 percent in the third, according to Thomson Financial. That's down from 27.1 percent in the first quarter, Thomson said.

"Every dime the consumer spends on gas, they don't spend it elsewhere in the economy," said Phil Dow, director of equity strategy at RBC Dain Rauscher in Minneapolis.

Faced with the market's increasing anxiety over a number of issues, some analysts began wondering whether the Federal Reserve should move on interest rates before its June meeting.

"If the Fed were to act now, it would remove some of the uncertainty and maybe let people return to focusing on fundamentals," said Michael Murphy, head trader at Wachovia Securities. "

Declining issues outnumbered advancers by 5 to 2 on the New York Stock Exchange, where consolidated volume came to 1.77 billion shares, compared with 1.68 billion on Friday.