The Dow soldoff on Wednesday and closed in bear market territory as Wall Street suffered from $144 oil prices, a worse-than-expected private-sector jobs report and a plunge in General Motors' stock. 

Today's Market

The Dow Jones Industrial Average fell 166.75 points, or 1.46% to 11215.51, the Standard & Poor’s 500 index declined 23.39 points, or 1.82%, to 1261.52 and the Nasdaq Composite Index lost 53.51 points, or 2.32%, to 2251.46. The consumer-friendly FOX 50 fell 11.75 points, or 1.31% to 888.01.

Stocks closed at their lowest levels on the day as traders found very little reason to buy amid a series of gloomy headlines. Earlier in the day the Dow had traded with modest gains. 

The steep decline brought the Dow and the Nasdaq officially into bear market territory, meaning they have lost more than 20% of their value since the highs of October 2007. The indexes had flirted with those levels in recent days but did not close below the thresholds until Wednesday.  

“Oil is driving us lower. It’s like beating us over the head with a hammer," Jason Weisberg of Seaport Securities told FOXBusiness. “People are pretty much tired of losing their money, second guessing themselves and being wrong. So many people have been burned, they aren’t willing to bring new money in.”

A day after General Motors (GM) saved the market from a selloff with a late-day rally, the stock plunged to a multi-decade low on Wednesday. The decline came after Merrill Lynch slashed its price target to just $7, downgraded the stock to "underperform" and said bankruptcy "isn't impossible." The huge losses come after GM held onto its No. 1 status by posting a better-than-expected 18% decline in June U.S. sales. 

Another Dow component, aluminum company Alcoa (AA), also suffered steep declines on Wednesday, pulling back sharply along with the rest of the heavy materials sector. On the other hand, JPMorgan Chase (JPM) led the blue chips, rising more than 1%.

The Nasdaq Composite declined further than the broader market on Wednesday. United Airlines (UAUA) led the decliners on the Nasdaq 100, tumbling 12% on the higher oil prices. Also, tech giant and BlackBerry maker Research in Motion (RIMM) posted big losses without any major company news. 

The talk on Wall Street focused on another record day for crude oil, which closed $2.60 higher at $143.97 a barrel, breaking the all-time high set just a day ago. Oil prices stayed hot late in the day, soaring to intraday records of more than $144 a barrel. 

Crude soared after the government reported oil stockpiles declined by a larger-than-expected two million barrels last week. Energy traders also bid up the commodity as the economic impact of a potential military strike on Iran by Israel loomed greatly. 

It's important to note that crude oil's record run on Wednesday failed to spark a rally among energy stocks. The sector as a whole closed 3% lower, with names like Hess (HES) and Schlumberger (SLB) closing almost 6% in the red. 

The day's economic data did little to quell fears that the economy will slip into a consumer-led recession during the second half of 2008. 

The ADP private sector job report signaled much more labor weakness than economists had predicted it would. The report showed private-sector employment fell by an estimated 79,000 jobs in June -- the steepest decline since the survey was created last year. Economists interviewed by Dow Jones had expected a more modest 20,000 decline.

The report could be a bad omen ahead of Thursday's government nonfarm payrolls report, which is expected to show a decline of 55,000 jobs. However, the ADP report has had a mixed record when it comes to predicting this much more important Labor Department one. Either way, the data has shown that the nation's labor situation remains at a weakened state but has not yet signaled an all-out recession has begun. 

Corporate Movers

Yahoo! (YHOO) helped lead tech stocks on Wednesday after The Wall Street Journal reported that Microsoft (MSFT) is gearing up for yet another run to acquire it. The on-again, off-again saga between the two tech giants took another turn as the newspaper reported Microsoft has been approaching other media companies like Time Warner (TWX) and News Corp. (NWS) about teaming up with it to break up Yahoo!. (News Corp. is the parent company of FOXBusiness and Dow Jones, the publisher of the Journal). 

Starbucks (SBUX) closed flat a day after the company released plans to shut down 600 stores and slash 12,000 jobs in a major reversal from the breakneck expansion it exemplified over the past decade. The company said the stores are located nearby other Starbucks and were not profitable. Most of them opened in 2006 or later. Starbucks also slashed its 2009 expansion plans. 

Citigroup (C) and JPMorgan saw their price targets slashed by UBS to $18 and $37 respectively, citing more writedowns for both companies in the second quarter. UBS also lowered its price target on Merrill Lynch (MER) to $35 from $47, predicting the firm will post a 2008 loss of $2.55 per share.

Blockbuster (BBI) jumped almost 6% after it took its $1 billion offer to buy Circuit City (CC) off the table, saying the deal didn't make sense due to market conditions. Circuit City's stock, which has plunged more than 80% over the past year, tumbled to its lowest level since January 1991 on the news. Blockbuster's stock declined 20% prior to unveiling its bid for Circuit City in April but then rebounded on Wednesday. 

Apollo Group (APOL), the for-profit education company that operates the University of Phoenix, rose double-digit percentages after beating the Street with its fiscal third-quarter results. The company's adjusted-earnings rose to 85 cents per share, seven cents above mean estimates from Thomson Reuters. Apollo's revenue jumped 14% to $835.2 million, topping estimates of $806.9 million. 

UnitedHealth (UNH) declined 2% after the insurer reportedly announced job cuts and also lowered its 2008 profit outlook. The company sees lowering its headcount by 4,000, according to Dow Jones. United now expects its adjusted-profit to come in at $2.95 to $3.05 per share in 2008, lower than its previous estimate of $3.55 to $3.60. Analysts polled by Thomson Reuters are looking for $3.52. 

Data Dump

The Commerce Department said Wednesday that factory orders rose 0.6% in May, matching average estimates from economists polled by Dow Jones. It was the weakest factory orders report since they declined in February. Excluding transportation orders, factory orders rose by just 0.4% in May, less than the 1.6% expected. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, fell 4.34 points, or 0.13%, to 3288.52. The FTSE 100, London's benchmark index, dropped 53.60 points, or 0.98%, to 5426.30.

On the continent, Paris's CAC 40 Index lost 44.73 points, or 1.03%, to 4296.48 while Germany's DAX fell 10.52 points, or 0.17%, to 6305.42.

In Asia, Japan's benchmark Nikkei 225 Index fell 176.83 points, or 1.31%, to 13286.37. Hong Kong's Hang Seng dropped 397.56 points, or 1.8%, to 21704.45.