Rough Start for Stocks

AIG and Citigroup are both falling in morning trading in New York, and oil prices surge past $125 a barrel for the first time ever. The dollar is mostly weaker, and Treasuries rise.
By TSC Staff ,

Updated from 8:07 a.m. EDT

Stocks in the U.S. were tumbling at the open of trading Friday as another sizable loss at

AIG

(AIG) - Get Report

and oil's continuing advance gave sellers the early advantage.

The

Dow Jones Industrial Average

was down 129 points to 12,738, and the

S&P 500

was losing 13 points at 1385. The

Nasdaq

was worse by 21 points to 2430.

One of the early drags was AIG, a component of the Dow, which was falling 7.3%. 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 electronic New York trading, crude futures were up $1.64 to $125.33 a barrel. On Thursday, oil closed at a record, then went past $124 for the first time in the extended session.

Elsewhere in the commodities complex, gold was up $4.70 to $886.80 an ounce, and silver tacked on 13 cents to $17.

AIG wasn't the only key financial company trading in the red.

Citigroup

(C) - Get Report

, also part of the Dow, fell 1.2% as investors awaited the outcome of management's meeting with analysts later in the day.

The

Financial Times

reported that CEO Vikram Pandit will discuss parting ways with as much as $400 billion in noncore assets in order to lower costs and boost profit. However, the report said, Pandit will reject the suggestion that the company should consider a breakup.

Meanwhile, markets overseas were sinking. Tokyo's Nikkei fell 2.1% overnight, and Hong Kong's Hang Seng shed 1.5%. Europe's major indices weren't much better. London's FTSE was losing 1.2%, and the Paris Cac was retreating 2.5%. Frankfurt's Dax was lower by 1.3%.

Treasury prices, though, were on the upswing. The 10-year note was adding 9/32 in price to yield 3.75%, and the 30-year bond was gaining 17/32 to lower the yield to 4.51%.

The dollar was weak against most of its competitors, including declines of more than 1.1% against both the yen and the Swiss franc. The euro rose 0.3% to $1.5454.

On the data side, the March U.S. trade deficit shrank to $58.2 billion from $61.7 billion in February, in part because the stumbling greenback made domestic goods cheaper overseas. Analysts expected the deficit to be $61 billion.

This article was written by a staff member of TheStreet.com.

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