US STOCKS-Fannie and Freddie fears, oil over $147 hit Wall St

* Stocks fall on Fannie, Freddie fears and oil's jump * Oil hits a record above $147 a barrel, hurting sentiment * S&P 500, Nasdaq post sixth straight weekly decline (Updates with IndyMac takeover)

By Kristina Cooke

NEW YORK, July 11 (Reuters) - U.S. stocks tumbled on Friday as fears about the stability of the top two home financing providers, Fannie Mae and Freddie Mac, combined with oil at a record above $147 to cloud the economic outlook.

Friday's slide capped a tumultuous week in which the S&P 500 joined the Nasdaq and the Dow in a bear market. It was the Nasdaq and the S&P 500's sixth straight weekly decline, their longest weekly losing streaks since 2004.

The broad market ended Friday's session down 1 percent as investors worried that the two pillars of the U.S. housing market could run short of capital, placing the fragile U.S. economy at even greater risk.

Fannie Mae and Freddie Mac traded erratically and ultimately ended lower. Pressure mounted for the U.S. government to act more swiftly to prevent the housing crisis from dragging down the nation's top mortgage finance agencies, as Treasury Secretary Henry Paulson indicated that a bailout was unlikely.

The anxiety surrounding the health of the financial system was heightened all the more late Friday when U.S. banking regulators swooped in to take over mortgage lender IndyMac Bancorp Inc IMB.N, the second-largest bank failure in U.S. history and the fifth bank to close this year.

A jump in U.S. crude oil prices CLc1 to a record above $147 per barrel further soured investor sentiment on concerns about the impact of higher fuel costs on corporate profits and consumer spending.

"The bottom line is that we're in the middle of a financial tsunami. This is a storm the likes of which this country hasn't seen," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

The Dow Jones industrial average .DJI fell 128.48 points, or 1.14 percent, to 11,100.54. For the week, the Dow dropped 1.7 percent, its fourth straight weekly decline.

The Standard & Poor's 500 Index .SPX slid 13.90 points, or 1.11 percent, to 1,239.49. For the week, it fell 1.9 percent.

The Nasdaq Composite Index .IXIC dropped 18.77 points, or 0.83 percent, to 2,239.08. It shed 0.3 percent for the week.

But all three indexes ended off their session lows. At one point, all three indexes were down more than 2 percent, with the Dow briefly dipping below the 11,000 level for the first time since July 2006. In a volatile session, major indexes also briefly turned positive in the late afternoon.

U.S. crude for August delivery CLc1 rose $3.43, or 2.4 percent, to settle at $145.08 a barrel on the New York Mercantile Exchange, after earlier hitting a record of $147.27.

FANNIE, FREDDIE AND THE FED

Fannie Mae (FNM.N) fell 22.4 percent to $10.25, off a session low at $6.68, and topped the list of the New York Stock Exchange's biggest percentage losers. In contrast, Freddie Mac (FRE.N) slipped 3.1 percent to $7.75, off a session low at $3.89.