New York  - US stocks closed lower on Friday as oil reached yet another record and investors predicted a slump in company earnings.

Crude oil climbed above 142 dollars per barrel in New York, a new high, after topping 140 dollars for the first time on Thursday.

Markets were little moved by a better-than-expected 0.8-per-cent rise in consumer spending in May, spurred mostly by government tax rebate cheques that began reaching consumers at the beginning of the month to help boost the sagging US economy.

Financial shares were driven lower by more speculation of additional losses related to an ongoing mortgage crisis, while investors were wary of the start of the second quarter earnings season.

"The news on earnings is that the second quarter is probably going to be worse than we thought," Ron Sweet of USAA Investment Management Co told Bloomberg financial news.

Analysts polled by Bloomberg forecast an 11-per-cent average drop in earnings for companies in the Standard & Poor's 500 index.

The blue-chip Dow Jones Industrial Average fell 106.91 points, or 0.93 per cent, to 11,346.51. The broader S&P 500 dropped 4.77 points, or 0.37 per cent, to 1,278.38. The technology-heavy Nasdaq Composite Index was down 5.74 points, or 0.25 per cent, to 2,315.63.

The Dow has plummeted 4.2 per cent over the week, the S&P 500 3 per cent and the Nasdaq 3.8 per cent.

The US currency dropped against the euro to 63.32 euro cents from 63.49 euro cents on Thursday. The dollar fell against the Japanese currency to 106.14 yen from 106.94 yen.

Gold rose 15.20 dollars to 931.30 dollars per fine ounce. (dpa)