People, I’m really starting to get worried here.

Stocks Fall on Inflation Fears

NEW YORK, Feb. 29 — U.S. stocks took a dive Friday on worries about inflation and the sputtering economy, with the Dow Jones industrial average plunging 2.5 percent in the afternoon, or 315 points, to close at 12,266. .

Leading the Dow lower was American International Group, one of the country’s leading insurers. It’s stock fell 7 percent after reporting a $5.3 billion quarterly loss as it wrote down $11.1 billion on credit derivatives linked to subprime mortgages.

The S & P 500 index fell 2.7 percent, or 37.05 points, to close at 1,330.

Traders were also nervous about the rising price of oil and its effect on inflation. The cost of a barrel of oil went over $103 early in the day but moderated later. In addition, a monthly survey by Chicago purchasing managers showed a weaker business market than anticipated in that area, according to the Associated Press.