Stocks Steer Lower

Updated from 12:58 a.m. EDT

Stocks in the U.S. conintued to track in the red Friday as another sizable loss at AIG AIG and oil's continuing advance gave sellers the advantage.

The Dow Jones Industrial Average was down 136 points to 12,730.81, and the S&P 500 was losing 11 points at 1,386. The Nasdaq was down 11 points at 2,439.

One of the drags on the Dow was AIG, which was falling 8.5% to $40.38. The selloff came a day after the insurer said it lost $7.81 billion in its first quarter because of big writedowns on credit-default swaps and mortgage-related investments.

Also depressing sentiment was oil's extended climb into uncharted territory. In recent New York trading, crude was up $1.69 to $125.38 a barrel. Earlier, it was as high as $126.20 in the premarket.

Elsewhere in the commodities complex, gold reversed course and went down $8.30 to $886.60 an ounce. Silver was losing 30 cents to $16.57.

AIG wasn't the only key financial company making headlines as the week wound down. Citigroup C, also part of the Dow, edged down 1% to $24.04 as investors mulled word that CEO Vikram Pandit is looking at ways to shed as much as $400 billion in noncore assets.

One of the big winners was Circuit City CC, whose shares jumped 8.8% to $5.21 after the consumer-electronics seller said it would open its books to potential buyer Blockbuster BBI and the video rental chain's largest shareholder, billionaire investor Carl Icahn.

On the technology side, Nvidia NVDA was gaining 4.8% a day after its quarterly report, which was followed by a Stifel Nicolaus upgrade. Priceline.com PCLN was even more impressive, jumping 14.6% to $141.86 in the wake of its strong numbers.