Stocks suffered steep losses as oil prices surged Tuesday, renewing worries that higher fuel prices could hobble the economic recovery.
Oil rose $2.66 to settle at $99.63 a barrel amid unrest in Iran and Libya. Iran clamped down on anti-government protesters, and forces loyal to Libya's Moammar Gadhafi attacked rebels expanding control over the country.
Prices jumped 13 percent last week with a rise in turmoil across North Africa and the Middle East. That pushed gas prices up 20 cents per gallon. As a result, Americans are now paying roughly $75 million more per day to fill their gas tanks than a week ago.
Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that a sustained increase in crude prices could pose a risk to the recovery. But he predicted only a temporary increase in inflation, not runaway prices. The Fed chief also said he expected the economy to grow this year, although not enough to lower the 9 percent unemployment rate.
The Commerce Department reported that builders began work on fewer homes, offices and commercial projects in January. The annual rate was near its decade low, set in August.
The Dow Jones industrial average lost 168.32 points, or 1.4 percent, to 12,058.02.
The Standard & Poor's 500 index fell 20.89, or 1.6 percent, to 1,306.33. The Nasdaq composite fell 44.86, or 1.6 percent, to 2,737.41. Three stocks fell for every one that rose on the New York Stock Exchange. Trading volume came to 1.2 billion shares. - AP