Energy stocks including Exxon Mobil, Chevron and drilling companies weakened Friday, as a bleak economic outlook and a surging dollar sent investors fleeing from riskier commodities.

The Dow Jones Industrial Average fell 57.59, or 0.56%, to 10213.62. The Dow fell 0.87% this week its second straight down week and is now down 2.06% year to date.

Its energy components fell Friday as oil prices tumbled nearly $1 a barrel Friday after the euro weakened and the dollar climbed following a European Central Bank official's suggestion that monetary policy should remain loose until next year. Exxon Mobil shed 40 cents, or 0.7%, to 58.89.

Chevron lost 79 cents, or 1%, to 75.05. Oil drillers stumbled after Sterne Agee & Leach cut its stock investment ratings on land drillers to neutral from buy, citing rising service costs, among other factors.

Nabors Industries fell 67 cents, or 3.9%, to 16.51, while Patterson-UTI Energy slipped 46 cents, or 3.1%, to 14.22, and Helmerich & Payne declined 1.09, or 2.9%, to 36.33.

The Nasdaq Composite edged up 81 cents, or 0.04%, to 2179.76. The Nasdaq rose 0.29% this week, but is still off 3.94% since the year's start.

The Standard & Poor's 500 share index declined 3.94, or 0.37%, to 1071.69. The S&P 500 fell 0.70% this week and is now off 3.89% year to date.

The Dow and the S&P 500 posted two straight weekly losses for the first time since July 2. Without a stream of upbeat corporate earnings to distract investors, the market has focused more closely on the recent stream of weaker than expected economic data. A resurgence in mergers and acquisitions this week lifted deal activity to its highest level since late 2009.

While many investors cheered cash rich companies' decisions to spend again, Ingarra noted that the deal flow highlights how cautious companies are choosing to grow in ways other than hiring new employees.

European market

European stocks fell Friday, with global economic worries overshadowing a smattering of fresh deals. The Stoxx Europe 600 index sank 0.7% to end at 252.15, its lowest close since July 21.

Losses were broad based, with the auto, industrial goods and construction sectors posting the steepest declines.

A fall in U.S. stocks after a dismal close the prior session following weak jobless and manufacturing data, which cast doubts over the global recovery, also hit European shares.

Among the main regional European benchmarks, the French CAC-40 index dropped 1.3% to close at 3,526.12, the German DAX index dropped 1.2% to 6,005.16, and the U.K.'s FTSE 100 index settled 0.3% lower at 5,195.28.

Asian market

Asian stock markets ended mostly lower Friday with property firms in China weighed by Beijing's latest attempt to reign in burgeoning real estate prices on the mainland.

The Nikkei Stock Average fell 2.0%, Hong Kong's Hang Seng Index declined 0.4%, China's Shanghai Composite dropped 1.7%, Taiwan's Taiex ended flat and South Korea's Kospi slipped 0.2%.

Chinese shares were dragged lower after the Ministry of Land and Resources said late Thursday that it will reinforce its campaign to crack down on land hoarding and misuse by property developers.

The ministry also said it aims to conclude a more intens

ive investigation into land misuse by the end of October. Gemdale Corp. dropped 1.8% and Poly Real Estate Group was down 2.9% and China Vanke fell 1.0%.

Lenders also lost ground on concerns that they might have to set aside large provisions to cover possible loan losses resulting from exposure to local governments' financing vehicles.

Authorities Thursday published detailed rules to regulate local governments' borrowing.

Commodities and metals

Base metal losses on the London Metal Exchange were moderated Friday following two days of heavy liquidation, with investors fearing the selloff had been too excessive.

Prices plunged Thursday after weaker than expected U.S. jobless claims, manufacturing data and leading indicators added to concerns around the global recovery.

And while they continued their steady decline Friday, LME three month copper, aluminum and nickel contracts in particular managed to pare some of their losses heading into the kerb close.

Three month copper, under heavy selling pressure, fell to an intraday low of $7,188 a metric ton down 1.5% on the day and almost 4% lower than the metal's intraday high on Thursday. It managed to recoup some of its losses, however, to close only 0.6% lower, at $7,252/ton.

Crude futures continued their recent slide Friday, settling at six week lows as a higher dollar and lower equities add to a weaker outlook for the economic recovery.

Light, sweet crude for September delivery settled 97 cents, or 1.3%, lower at $73.46 a barrel on the New York Mercantile Exchange.

Trading for the contract, which expired Friday, was extremely light, with only 27,480 lots traded.

Second month October prices, the most actively traded contract, settled down 95 cents, or 1.3%, to $73.82. October Brent crude on the ICE futures exchange traded $1.04 lower at $74.26 a barrel.

Crude has fallen for 11 of the last 13 sessions, down from a high above $82 two weeks ago, as weak economic reports leave traders worried about future crude demand.

Gold futures slipped a bit amid pressure from a stronger dollar, but the metal didn't stray far from its seven week high as uncertainty about the global economic recovery remained on investors' minds.

The most actively traded gold contract, for December delivery, fell $6.60, or 0.5%, to settle at $1,228.80 an ounce on the Comex division of the New York Mercantile Exchange.