Markets hit on all fronts; Dow off 85

Wall Street retrenched Friday as the trade deficit widened and oil prices surged, while a weak quarterly report from Dell Inc. also disheartened the market.

Traders were displeased when the Commerce Department reported that the trade deficit, the imbalance between what America sells abroad and what it imports, is running higher than last year’s all-time record. The trade deficit rose to $58.8 billion in June, an increase of 6.1 percent from the May deficit of $55.4 billion.

More than half the deterioration in June reflected America’s surging foreign oil bill, which hit a record high of $19.9 billion, an increase of almost 10 percent from May. Analysts say climbing oil prices will send that figure higher in coming months.

Crude oil futures hit new records on reports of U.S. refinery outages. A barrel of light crude closed at $66.86, up $1.06, on the New York Mercantile Exchange.

In company news, a rare disappointment from Dell sent its stock sharply lower and sparked selling in other tech stocks. Its second-quarter revenue was nearly $300 million below analysts’ forecast and its third-quarter outlook was also well below projections. And McDonald’s Corp. fell after soaring Thursday on speculation a real estate company is eyeing its store locations and other property.

The Dow Jones industrial average dropped 85.58, or 0.80 percent, to 10,600.31 after rising 91.48 Thursday.

The Standard & Poor’s 500 index fell 7.42, or 0.60 percent, to 1,230.39, and the tech-focused Nasdaq composite index dropped 17.65, or 0.8 percent, to 2,156.90.

Bonds rose, with the yield on the 10-year Treasury note falling to 4.25 percent from 4.33 percent late Thursday. The U.S. dollar was up against the euro. Gold prices were higher.

“The volatility we’re seeing has nothing to do with investors; it has everything to do with traders,” said Sandy Lincoln, chief market strategist at Wayne Hummer Asset Management. “Investors are thinking two, three, four, five or 10 years out. Traders are thinking two, four, five or 10 hours out.”

Declining issues led advancers roughly 2 to 1 on the New York Stock Exchange, where volume was 1.47 billion shares, even with Thursday.

The Russell 2000 index of smaller companies fell 6.37, or 0.96 percent, to 660.

Overseas, Japan’s Nikkei stock average fell 0.01 percent. In afternoon trading, Britain’s FTSE 100 was down 0.24 percent, Germany’s DAX index was down 0.34 percent, and France’s CAC-40 was down 0.72 percent.