LONDON (ShareCast) - Blue chips closed lower again after a rollercoaster day that saw oil prices sink and chip giant Intel remind investors that for companies based in the US and exporting the weak dollar can be good news.

Across the markets, the Dow Jones closed down 92 points to 10,962. Nasdaq rose 2 points to 2,215. The S&P 500 ended down 13 points at 1,214.

Oil prices recorded the second-largest actual daily fall on record as Federal Reserve Chairman Ben Bernanke said that inflation and high fuel prices will reduce US demand for oil. Light crude fell more than $6 per barrel to close at just under $139 a barrel.

Bernanke also told the Senate Banking Committee that the US economy is facing "numerous difficulties" and indicated that the interest rate cuts so far had not stabilised the US economy.

Intel produced some unexpected good news as it cruised past forecasts for the second quarter. Intel's net income in the three months rose by 25% to $1.6bn, up from from $1.3bn last year with profits and sales bolstered by a weak dollar. The sales forecast for the third quarter was also higher than expected at between $10bn and $10.6bn.

Elsewhere, on the economic front, the Commerce Department said retail sales edged up by 0.1%, weaker than the 0.4% analysts predicted. The Labor Department showed core inflation, which excludes energy and food, increased 0.2%, while overall wholesale prices increased by a larger-than-expected 1.8%.

Meanwhile, the July NY Empire State index improved to a reading of minus 4.9 from minus 8.7 in the previous month.

Financial stocks continued to tumble with both Fannie Mae and Freddie Mac posting heavy losses again. Wachovia slumped heavily after an influential Oppenheimer & Co. analyst downgraded it to underperform.

General Motors will cut staff costs by 20% and suspend dividends as it seeks to raise funds following a difficult period for the car manufacturer. It said it was taking the steps in light of the weak US economy, record high fuel prices, shifts in consumer vehicle preferences and the lowest US industry sales volumes in a decade.

Health-care firm Johnson & Johnson saw second-quarter profit rise 8% thanks to higher sales of consumer health items and surgical and diabetes products. Net income rose $3.33bn versus $3.08bn previously.

S&P 500 - Risers
First Horizon Ntl Cp (FHN) $5.89 +16.87%
M B I A Inc (MBI) $4.40 +10.28%
Sun Microsystems, Inc. (JAVA) $9.58 +9.11%
Sprint Nxtel Cp (S) $9.00 +8.96%
Washington Mutual (WM) $3.48 +7.74%
State Street Cp (STT) $59.53 +6.88%

S&P 500 - Fallers
Fannie Mae (FNM) $7.15 -26.52%
Freddie Mac (FRE) $5.29 -25.60%
Office Depot Inc (ODP) $5.76 -9.00%
Amer Intl Group Inc (AIG) $20.56 -8.82%
Bk Of America Cp (BAC) $18.52 -8.09%

Dow Jones I.A - Risers
General Motors (GM) $9.90 +5.54%
Microsoft Corporation (MSFT) $26.12 +3.86%
International Business Machines (IBM) $124.00 +2.02%
Johnson and Johnson (JNJ) $67.70 +1.94%
Coca Cola Co The (KO) $51.74 +1.53%

Dow Jones I.A - Fallers
Amer Intl Group Inc (AIG) $20.56 -8.82%
Bk Of America Cp (BAC) $18.52 -8.09%
Citigroup Inc (C) $14.50 -4.73%
Exxon Mobil Cp (XOM) $81.87 -4.16%
Caterpillar Inc (CAT) $67.37 -3.31%

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