Dow falls 118 as oil slides, Japan worries rise

Energy stocks stumble as crude oil falls below $107. Drivers are cutting back, a new report shows. Japan raises the severity rating on its nuclear problem. Gold pulls back, but airlines jump. Wal-Mart and Procter & Gamble boost the Dow; Alcoa lags.

A series of inconvenient truths dawned on Wall Street today: The economy may not be as strong as thought; high gas prices are already causing people to change their driving habits; and the Japanese nuclear crisis is worse than thought.

The result was a sell-off in crude oil, gold and a broad array of commodities -- and a steep decline in stocks. In the afternoon, bargain hunters emerged, and the market modestly trimmed its losses.

The Dow Jones industrials ($INDU) were down 118 points, or 1%, to 12,264. The blue chips had been down as many as 148 points. The Standard & Poor's 500 Index ($INX) dropped 10 points, or 0.8%, to 1,314, and the Nasdaq Composite index ($COMPX) was off 27 points, or 1%, to 2,745.

Crude oil settled down $3.67 to $106.25 a barrel in New York. Brent crude was down $3.34, or 2.7%, to $120.64 a barrel in London.