NEW YORK >> Another sharp drop in the price of oil prompted investors to dump stocks again, leaving the U.S. market with its worst weekly loss since the summer.
Oil and gas companies led stocks lower Friday, capping an ugly week. Southwestern Energy plunged 14 percent and Chesapeake Energy sank 9 percent.
Investors sought refuge in bonds. Treasury prices rose, sending yields lower.
The price of oil continued to fall as investors anticipated more oversupply just as global demand weakens.
U.S. crude slumped 3 percent to $35 a barrel, the lowest price since early 2009.
The Dow Jones industrial average lost 309 points, or 1.8 percent, to 17,265.
The Standard & Poor's 500 gave up 39 points, or 1.9 percent, to 2,012. The Nasdaq declined 111 points, or 2.2 percent, to 4,933.
All 10 sectors of the S&P 500 index fell, led by suppliers of raw materials and energy companies. Investors worry that the continuing drop in the price of oil is a result of weakness in the global economy, especially China, and could further cut profits at big energy companies, which have already been decimated this year. Chevron lost 2.7 percent.
"We're stockpiling commodities and demand is not picking up," said Tim Courtney, chief investment officer of Exencial Wealth Advisors. "It's kind of a depressing market."
The price of oil fell further after the International Energy Agency said that oversupply would continue until late next year and demand would weaken. Benchmark U.S. crude dropped $1.14, or 3 percent, to close at $35.62 a barrel in New York. Oil has been falling for 1 1/2 years and is now at its lowest level since early 2009.
Britain's FTSE 100 dropped 2.2 percent. France's CAC 40 shed 1.8 percent and Germany's DAX lost 2.4percent.
Dow Chemical and DuPont are giving up gains earlier this week after they confirmed their widely anticipated $130 billion deal to merge their businesses. The new company is due to split into three parts, one focused materials, one on agriculture and the last on specialty products. Dow Chemical fell $1.21, or 2 percent, to $53.70. DuPont lost $3.99, or 5 percent, to $70.56.
The tie-up is the latest in a surge of deals worth more than $4.7 trillion so far this year, according to Dealogic. That is a record, beating the previous top for deals in 2007.
Software maker Adobe Systems rose $3.97, or 4.5 percent, to $92.93 after reporting earnings per share in its latest quarter that exceeded analysts' expectations. The stock is up 28 percent since the start of the year.
Corning rose 88 cents, or 5 percent, to $18.57 after the company said it will give up its stake in Dow Corning, a joint venture with Dow Chemical. Instead it will invest in a semiconductor business that is owned by Dow Corning.
Retail sales grew 0.2 percent in November, an improvement compared to August-October. Consumers spent more money on apparel, sporting goods and electronics and online retailers did better. Department store sales were flat.
Investors are also focused on a two-day policy meeting at the Federal Reserve, which wraps up Wednesday. Policymakers are widely expected to announce that they're raising key interest rates from their record low levels. Recent economic reports indicate that the U.S. economy is healthy enough to withstand a rate hike.
Investors are cautious ahead of a batch of monthly economic data expected on Saturday, including retail sales, fixed asset investment and industrial production. Further out, a report on foreign direct investment in China is due on Wednesday. The latest figures will provide an update on the world's second biggest economy, which is struggling with a stubborn downturn.
Japan's Nikkei 225 index climbed 1 percent, but most other major indexes in Asia were down. South Korea's Kospi lost 0.2 percent, Hong Kong's Hang Seng slipped 1.1 percent and mainland China's Shanghai Composite lost 0.6 percent. Australia's S&P/ASX 200 dipped 0.2 percent.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.12 percent from 2.23 percent on Thursday. The dollar fell to 120.79 yen from 121.64 yen. The euro strengthened to $1.0995 from $1.0939.
Precious and industrial metals futures closed mixed. Gold edged up $3.70 to $1,075.70 an ounce, silver fell 23 cents to $13.88 an ounce and copper rose four cents to $2.12 a pound.
Brent crude, the international oil benchmark, fell $1.80, or 4.5 percent, to $37.93 a barrel in London. In New York, heating oil plunged eight cents, or 6.5 percent, to $1.146 a gallon, wholesale gasoline was little changed at $1.282 a gallon, and natural gas lost 2.5 cents, or 1.2 percent, to $1.99 per 1,000 cubic feet.