According to preliminary calculations, the Dow Jones industrial average fell 70.28, or 0.7 percent, to 10,038.90, the second straight day of losses and third in the last four sessions. The Dow lost more than 135 points yesterday, and is now at its lowest level since Aug. 17.

The Standard & Poor's 500 index was down 5.20, or 0.5 percent, at 1,108.36, while the Nasdaq composite index gained just 0.72, or 0.04 percent, to 1,886.43.

Analysts said oil prices would keep consumer spending down and business costs rising, a combination that will squeeze profit margins and lower third-quarter earnings. A barrel of light crude settled at $48.46 today, up 11 cents on the New York Mercantile Exchange, after reaching an intraday high of $49. Crude futures closed at a record high $48.70 on Aug. 19 and set a new intraday record of $49.20 on Aug. 20.

Oil prices were also blamed for a lower reading on the Conference Board's index of leading economic indicators, the third straight monthly decline. Investors believed the index sent a signal that economic growth would taper off.

"If the markets are going to move higher, we're going to need some relief on the oil front so that the earnings picture improves," said Hugh Johnson, chief investment officer at First Albany Corp.

The Conference Board said its Composite Index of Leading Economic Indicators fell 0.3 percent in August to 115.7, following a drop of 0.3 percent in July and larger than the 0.2 percent drop forecast by economists. The index, which measures the potential for future economic growth, left Wall Street with reduced hopes for a strong finish to the year, although the Conference Board said the three months of declines were not enough to signal an end to growth entirely.

Investors' concerns about job growth — and the resulting consumer spending — increased as the Labor Department reported a 14,000 increase in first-time jobless claims for the week. While the hurricanes in Florida were blamed for the jump, investors have been hoping for a return to this spring's strong job growth as a sign of strength in the economy.

"This kind of data ... just adds to the uncertainty that the markets are dealing with," said Jay Suskind, head trader at Ryan Beck & Co. "You've got rising oil prices, economic data that's mostly OK, questions about jobs and a presidential election all weighing things down."