NEW YORK - Wall Street tumbled Wednesday as the price of a barrel of oil soared to a record near $124 and touched off concerns that the stock market's recent gains might have been premature as consumers grapple with rising energy and food costs.

The major stock market indexes each lost more than 1.5 percent, with the Dow Jones industrial average declining by more than 200 points.

Sharp gains in commodities prices have drawn fresh attention from investors worried that consumers -- the lifeblood of the U.S. economy -- will be forced to reduce discretionary spending to keep up with increasing costs for necessities.

Oil prices have doubled in the past year, causing gasoline prices to surge further into record terrain and strap consumers, who drive more than two-thirds of economic activity, with another financial burden.

Wall Street slid amid a cacophony of worries about the effects of rising prices. Kansas City Federal Reserve President Thomas Hoenig in a speech late Tuesday pointed to inflation as his main concern. Treasury Secretary Henry Paulson said Wednesday that while the worst of the credit crisis might have passed, rising gas prices will dampen the benefits from the 130 million economic stimulus checks that the government is distributing.

The Dow fell 206.48, or 1.59 percent, to 12,814.35, after fluctuating early in the session.

The S&P 500 fell 25.69, or 1.81 percent, to 1,392.57, and the Nasdaq composite index fell 44.82, or 1.80 percent, to 2,438.49.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.28 billion shares compared with 1.23 billion shares traded Thursday.

Bond prices rose as investors pulled more money out of stocks and placed it in the safer confines of the Treasury market. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.85 percent from 3.92 percent late Tuesday.

Light, sweet crude rose $1.69 to settle at $123.53 a barrel on the New York Mercantile Exchange. The dollar rebounded against other major global currencies, and gold prices fell.

Overseas, Japan's stock market rose 0.38 percent. Britain's FTSE index closed up 0.74 percent, Germany's DAX index rose 0.84 percent, and France's CAC-40 rose 0.68 percent.