US stock markets fell on Friday as concerns about the deteriorating health of the economy continued.
The US housing slowdown has led to wider economic problems
The main Dow Jones index closed down 2.5%, or 315.79 points, at 12,266.39, while the S&P 500 index fell 2.70% at 1,330.72.
Consumer spending figures showed households were being stretched by rising food and oil prices.
And a prediction that the cost of the credit crisis may escalate to $600bn (£300bn) depressed banking shares.
Research from Swiss bank UBS said the banking industry alone would lose $350bn, $160bn of which had already been written off.
American insurer AIG was among the biggest losers, down 6.5% after the company announced the biggest quarterly loss in its 89 year history - $5.29bn.
Oil prices hit another record high, which continues to heighten fears of inflation in the US economy.
"We really had to face a plethora of negative news," said Art Hogan, chief market strategist at Jefferies & Co.
Computer maker Dell fell 4.7% to $19.90 after it posted a lower-than-expected quarterly profit on Thursday, warning that customers may rein in spending.
The Nasdaq Composite Index closed down 60.09 points, or 2.58% at 2,271.48.