The news caused traders to take profits, particularly in the technology sector, from big gains made earlier in the session. The Dow Jones industrial average and the Standard & Poor's 500 index fell from record levels that had been reached after Wal-Mart Stores Inc. lifted its profit forecast.

The market turned in the afternoon after ECB governing council member Axel Weber said rising inflation in the euro zone may require additional policy action, according to Dow Jones Newswires. The comments appeared to raise concerns on Wall Street that European growth could slow and that in the United States, inflation could prevent the Federal Reserve from making another rate cut.

Many investors have been betting on another rate reduction from U.S. policy makers, who lowered the target federal funds rate by half a percentage point on Sept. 18 in response to a tightening in the credit markets.

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NEW YORK (AP) — Petroleum futures rose sharply Thursday and oil prices passed $83 a barrel after the government reported an unexpected decline in crude oil inventories.

Prices also were supported by an International Energy Agency report that concluded oil inventories held by the world's largest industrialized countries have fallen below a five-year average, and by concerns that clashes between Turkish forces and Kurdish rebels could affect Iraqi oil supplies.

The weekly inventory report from the Energy Department's Energy Information Administration said crude supplies fell by 1.7 million barrels in the week ended Oct. 5. Analysts surveyed by Dow Jones Newswires on average expected oil inventories to rise by 1 million barrels.

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NEW YORK (AP) — Several of the nation's largest retailers cut their earnings forecasts Thursday after lingering summer weather and an uncertain economy kept consumers from shopping last month and left the big merchants with disappointing sales.

As the store owners reported September sales figures Thursday, the biggest losers were apparel sellers including Limited Brands Inc. and Gap Inc. Target Corp., J.C. Penney Co., Limited Brands Inc. and Nordstrom Inc. were among those lowering their earnings outlooks.

Wal-Mart Stores Inc. posted a modest sales gain that was slightly below analysts' expectations, but raised its third-quarter profit outlook because of cost-cutting.

The news wasn't encouraging as the holiday season fast approaches. Retailers have been struggling with a sales slowdown for most of the year as shoppers contend with higher food and gasoline prices as well as the still weak housing market. But last month, stores also had to deal with warm, muggy weather that wilted consumer demand for fall clothing.

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WASHINGTON (AP) — The falling dollar led more foreigners to buy American in August, helping to push the trade deficit down to the lowest point in seven months. That was welcome news for the Bush administration as it tries to deal with a Congress unhappy over huge trade imbalances and 3 million lost manufacturing jobs.

President Bush also got good news Thursday on his other deficit headache. The budget deficit declined in 2007 to the lowest level in five years, dropping to $162.8 billion, an $85 billion improvement over 2006.

Bush said the declining budget deficit was a sign that his economic strategy of cutting taxes to grow the economy was working. But Democrats pointed to the soaring national debt under Bush as evidence of his fiscal irresponsibility.

The Commerce Department reported that the trade deficit declined to $57.6 billion in August, down 2.4 percent from the July imbalance. It was the lowest gap between exports and imports since January and a much better showing than had been expected.

The improvement reflected a 0.4 percent rise in exports, which climbed to a record $138.3 billion, as the decline in the value of the dollar against many other foreign currencies boosted sales of American farm products, industrial supplies and consumer goods to all-time highs.

A weaker dollar makes the cost of imports and foreign trips more expensive for Americans, but makes American products cheaper on overseas markets.

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WASHINGTON (AP) — Some of the nation's largest drug makers will no longer sell cold medicines targeted at infants due to safety concerns.

Thursday's voluntary decision by Johnson and Johnson, Wyeth and other drug makers to pull their products off the market comes two weeks after government health officials said parents should not give the over-the-counter medicines to children younger than two.

Although many of the products come in drop-size doses designed for youngsters, a trade group for the medicine makers said there have been rare instances of parents accidentally overdosing young children. The group said parents should not use any medicines they have at home in infants.

The Consumer Healthcare Products Association said last month it agreed with government officials that use of the drugs should be restricted, but had previously stopped short of pulling the products from the market.

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WASHINGTON (AP) — With its $25 billion buyout in legal limbo, Sallie Mae has been contacted by other investors potentially interested in acquiring the student lender, whose business has been hurt by the uncertainty.

Sallie Mae, formally known as SLM Corp., on Thursday said it swung to a third-quarter loss of $344 million. It blamed the weaker-than-expected results in part on the effect of a new law that reduces by $20 billion federal subsidies to student lenders and soured its would-be buyers on the transaction, which is now being fought in court.

Until the dispute is resolved, Chairman Albert Lord said, Sallie Mae cannot negotiate with other potential buyers, pursue its own potential acquisitions or buy back shares.

The terms of the company's buyout agreement with an investor group led by private-equity firm J.C. Flowers & Co. prohibit such activities.

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LONDON (AP) — BP PLC outlined a plan to streamline its structure, cutting the number of business units and stripping out management layers, as it admitted Thursday that its poor financial performance and safety record had left it lagging behind its oil industry peers.

The massive restructuring is the linchpin of new Chief Executive Tony Hayward's attempt to restore BP's advantage against its competitors after a host of safety and operational problems.

Analysts have blamed BP's complex organizational layout for many of those woes, which have included a deadly Texas refinery accident, an oil spill in Alaska and delays at its Gulf of Mexico oil and gas projects.

Under Hayward's plan, that will start with cutting the number of BP's main business segments from three to two. The company will incorporate its existing gas, power and renewables business into the two remaining units — exploration and production, and refining and marketing.

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NEW YORK (AP) — Countrywide Financial Corp. said Thursday its mortgage fundings for September fell 44 percent from the same period a year ago, and the mortgage lender is now facing a potential federal investigation over the timing of stock sales by its chief executive.

Countrywide, the nation's largest mortgage lender, said total mortgage fundings last month fell to $21.2 billion from $38.1 billion a year ago.