U.S. stocks fall on AIG loss

U.S. stocks fell on Friday after American International Group,the world's largest insurer, reported a record $7.8 billion quarterly loss, rekindling concerns about financial services companies.

Oil's price extended its record-breaking streak, rising above $126 a barrel and raising concern about higher inflation and slower economic growth.

AIG had to write down assets linked to subprime mortgages and said it would raise $12.5 billion in new capital to strengthen its balance sheet.

Another big financial company, Citigroup Inc, said it intends to shed roughly $400 billion of non-core assets in a bid to become more competitive.

The Dow Jones industrial average .DJI was down 109.99 points, or 0.85 percent, at 12,756.79. The Standard & Poor's 500 Index .SPX was down 11.17 points, or 0.80 percent, at 1,386.51. The Nasdaq Composite Index .IXIC was down 17.02 points, or 0.69 percent, at 2,434.22.

(Agencies)