A $5 surge in crude oil prices and more worries about financial stocks sank Wall Street on Wednesday, sending the Dow more than 200 points into the red. 

Today's Market

The Dow Jones Industrial Average slid 205.99 points, or 1.68% to 12083.77, the Standard & Poor’s 500 index fell 22.95 points, or 1.69%, to 1335.49 and the Nasdaq Composite Index lost 54.93 points, or 2.24%, to 2394.01. The consumer-friendly Fox 50 fell 15.64 points, or 1.63%, to 944.49.

The market never even peeked into positive territory on Wednesday as the Dow posted its second triple-digit loss over the past four trading days. As the day went on the market kept sinking lower, closing at its worst levels of the session. 

The bears have taken control of the stock market, which surged this spring after the Fed intervened in the Bear Stearns collapse in March. Now down around 9% year-to-date, the Dow has erased almost all of that rebound over the past month. The Dow is now less than 100 points away from crossing back below the psychologically-important 12,000 mark. 

The Nasdaq Composite extended its losing streak to four, falling even further than the broader market. Coming into the day the index had lost 4% of its value over the prior three days, the worst such stretch since March 10.

“Once oil started ticking up, there was really no hope for the market," Alan Valdes of Hilliard Lyons told FOXBusiness. 

Just three of the 30 stocks on the Dow advanced on Wednesday and two of them were energy titans ExxonMobil (XOM) and Chevron (CVX), which benefited from the oil spike. 

Aluminum giant Alcoa (AA) took a big hit on Wednesday, falling nearly 8% after it was downgraded by JPMorgan Chase (JPM) to "neutral" from "overweight." Also, Dow members Citigroup (C) and General Motors (GM) closed with big losses. 

Tech stocks fell sharply on Wednesday, with Microchip Technology (MCHP) diving almost 10% to lead the way down on the Nasdaq 100. The stock was hurt by an analyst downgrade from JPMorgan to "neutral" from "overweight." Also, United Airlines (UAUA) plunged 11% as airlines were hammered by the higher energy costs. 

As if the market needed any more pressure, crude oil prices jumped on Wednesday after the government reported crude stockpiles fell by 4.6 million barrels last week -- more than four times higher than the 1.1 million barrel decline that Wall Street expected. However, the report also showed some signs of weakening U.S. demand. 

Crude closed $5.07 higher at $136.38 a barrel, less than $3 shy of the all-time record of $139.12 that was set last week. In addition to the new inventory data, crude was pushed higher by the weaker U.S. dollar and a BP (BP) report that showed global production declined last year for the first time in five years. 

Goldman Sachs (GS) sparked selling among financial stocks on rumors of a possible large writedown. A Goldman Sachs spokesman said: "We don't comment on market rumors." A Goldman writedown would likely weigh heavily on Wall Street's psyche as the investment bank has been able to evade the minefields of the subprime debacle to this point.

“Goldman largely avoided it. The financials are not only anchoring us down but they are taking us down," said Frank Davis, director of sales and trading at Lek Securities.

Struggling investment bank Lehman Brothers (LEH) lost another 13% of its value on Wednesday, falling for the fourth consecutive day. Shareholders haven't reacted well to a Financial Times report that Lehman could raise capital from Korean financial institutions. Also, Lehman was downgraded by Merrill Lynch (MER) just a week after it upgraded the bank. 

Washington Mutual (WM) plunged to a 16-year low on more worries about credit and mortgage losses. Standard & Poor's lowered its price target by $2 to $5 and increased its 2008 loss forecast by more than double to $4.32 per share, according to Thomson Reuters. The stock has fallen 10 out of the past 11 days. 

On the broader economic front, the Federal Reserve released its "Beige Book," which said rising food and energy prices have hurt consumer spending. The report, which is a collection of general observations on the nation’s economy, also said Fed districts saw tighter lending standards and "generally weak" housing. 

“Even though we knew the endings of that book long before it was published, it was still a drag on the market," said Valdes. 

Corporate Movers 

Corporate Express (CXP) signed off on a $2.7 billion buyout offer from Staples (SPLS), which sweetened its offer four times. In agreeing to the Staples deal, Corporate Express backed off of its offer for Lyreco of France. The latest version of the Staples deal values Corporate Express at $14.36 per share. Corporate Express closed at $14 per share on Tuesday. 

CME Group (CME), the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade, neared a deal to acquire Nymex Holdings (NMX), the operator of the New York Mercantile Exchange. CME filed a registration statement with the SEC on Wednesday and hopes to have the deal done by the fourth quarter. CME also reaffirmed its offer of 0.1323 of its shares along with $36 for each Nymex share. The deal was initially agreed upon by the two sides in March but has stalled since then. 

Alcoa (AA) has no plans to sell itself or spin off part of its business, a JPMorgan Chase analyst wrote in a research note. The decision will likely leave shareholders "very disappointed," analyst Michael Gambardella wrote. He cut the stock from "overweight" to "neutral" on the prediction. Also, the company said it plans to take a 2 or 3 cent charge in the second quarter related to an explosion at a venture in Australia. Alcoa has been one of the best performers on the Dow this year, rising more than 16% year-to-date. 

Agrium (AGU) helped lift the agriculture sector on Wednesday when it boosted its second-quarter earnings forecast due to "unprecedented demand." The Canadian fertilizer maker sharply raised its earnings guidance to a range of $2.80 to $3 per share. Previously Agrium saw $1.92 to $2.22 in earnings. Wall Street is only looking for $2.50. The company cited huge demand amid strong global crop prices. Rivals Potash (POT) and Mosaic (MOS) also benefited from Goldman Sachs price target upgrades, according to Dow Jones. 

Martha Stewart Living Omnimedia (MSO) CEO Susan Lyne stepped down after four years on the job for undisclosed reasons. Lyne will be replaced by Wenda Harris Millard, president of media, and Robin Marino, president of Merchanding. The two will serve as co-CEOs. 

Caterpillar (CAT) boosted its quarterly dividend by 17% to 42 cents per share. The dividend is payable on Aug. 20 and valid for stockholders as of July 21. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, fell 65.31 points, or 1.83%, to 3509.39. The FTSE 100, London's benchmark index, lost 104.00 points, or 1.78%, to 5723.30.

On the continent, Paris's CAC 40 Index slid 100.17 points, or 2.10%, to 4660.91 while Germany's DAX fell 120.84 points, or 1.78%, to 6650.26.

Tokyo's Nikkei 225 Index gained 162.31points to 14183.48. Hong Kong's Hang Seng lost 47.92 points, or 0.2%, to 23327.60.