NEW YORK - US STOCKS slumped on Thursday as rising oil prices raised concerns consumers will cut spending and investors fretted about ailing mortgage finance giants Fannie Mae and Freddie Mac.

The Dow Jones Industrial Average dropped 83.13 points (0.73 per cent) to 11,334.30 in opening trade and the tech-heavy Nasdaq composite fell 18.86 points (0.79 per cent) to 2,370.22.

The broad-market Standard & Poor's 500 index shed 7.52 points (0.59 per cent) to 1,267.02.

US stocks registered modest gains Wednesday amid upbeat earnings from technology firm Hewlett-Packard that offset jitters about Fannie Mae and Freddie Mac. The Dow added 0.61 per cent, the Nasdaq gained 0.20 per cent and the S&P 500 rose 0.62 per cent.

Renewed fears about the solvency of Fannie and Freddie, government-sponsored enterprises (GSEs) that underpin roughly 40 per cent of US home loans, and speculation about a government bailout sent their shares into freefall pm Wednesday. The two firms' shares have lost more than 90 percent of their value in the past year.

'It appears that more time or resolution to the two company's problems may be needed before stocks can resume their uptrend,' said Al Goldman, analyst at Wachovia Securities. -- AFP