Market drops 3 percent on profit jitters, oil record

By Kristina Cooke

NEW YORK (Reuters) - Stocks plunged on Thursday, with the Dow sliding about 360 points to a 21-month low as oil hit a record and Wall Street powerhouse Goldman Sachs urged investors to sell bank and automaker shares, escalating concern about the outlook for profits.

Oil surged above $140 a barrel in New York trading, compounding fears that soaring inflation will hamper a global economy already on the ropes.

Investors found little to lift their spirits amid the barrage of harsh news, and the three major U.S. stock indexes fell 3 percent. All 30 stocks in the Dow ended in the red.

Technology shares were hammered after weak profit outlooks from BlackBerry maker Research in Motion and software maker Oracle Corp. Disappointing U.S. earnings from Nike further darkened the mood.

Financial stocks plummeted after Goldman Sachs forecast more write-downs at Citigroup and Merrill Lynch & Co.

General Motors' stock sank to its lowest level in 53 years, after Goldman warned that the big U.S. automaker could have to raise capital and cut dividends in a brutal slowdown for the auto industry.

"The price of oil is now at $140 and there is real concern that global growth is going to seriously slow down and that's hitting all sectors," said Eddie Bakker, managing director of equity sales and trading at Calyon Securities in New York.

The Dow Jones industrial average slid 358.41 points, or 3.03 percent, to 11,453.42, putting it within the grasp of a bear market.