Stocks on Wednesday slumped for a second straight day, as a surprise spurt in oil prices above the $50-a-barrel mark depressed investor sentiment.

The Nasdaq stock market saw its eight-day winning streak snapped, the longest string of daily advances since December 1999.

The day's principal economic report--a stronger-than-expected 1.9 percent gain in new orders for durable goods at the nation's factories in April--was seen as a sign of flat manufacturing activity so far this year.

"We expect no near-term improvement," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics. "The soft patch is not over."

"Both the U.S. economy and the U.S. manufacturing sector lack vigor," wrote John Lonski, chief economist at Moody's Investors Service, in his analysis of the latest durable goods report, which was the strongest in five months and was led by an 8 percent surge in transportation equipment.

Leaders of manufacturing companies attending a conference sponsored by Reuters were more upbeat about business conditions in the U.S.

James Owens, chief executive of Peoria-based Caterpillar, told Reuters, "Speaking to dealers and customers all over the country, they see a robust set of work out in front of them from contracts in this country, from trucking firms in this country."

The pace of investment by industrial companies was picking up, Owens added.

David Cote, chief executive of Honeywell International, said at the conference: "There are a lot of people with concerns about the trade deficit or the fiscal deficit. But at the end of the day, consumers are still spending, debt looks to be in a decent overall position, businesses are expanding, and overall I think things are looking pretty good."

Those remarks notwithstanding, Caterpillar and Honeywell were the two biggest percentage losers in the Dow Jones industrial average. Caterpillar slipped $1.36, to $92.47. Honeywell lost 64 cents, to $36.63.

The Dow fell 45.88 points, to 10,457.80. The Nasdaq slid 11.50, to 2050.12.

The broader Standard & Poor's 500 index slipped 4.06, to 1190.01, led by losses at Cisco Systems and General Electric.

Oil giant Exxon Mobil was the biggest winner in the Dow and the S&P 500 index. Energy stocks remain the best-performing sector in 2005, though the sector is a loser thus far in the second quarter.

The Russell 2000 index of small-company stocks lost 6.55, or 1.1 percent, to 606.40.

Analysts blamed the price of oil for Wednesday's slump.

Crude oil for July delivery jumped $1.31 a barrel, to $50.98, in New York futures trading. The move reflected a report of lower inventories of crude oil in the U.S.

Stocks sold off sharply in March as crude oil prices climbed to a peak close of $57.27 on April 1. Falling oil prices in mid-May helped spark a stock market rally.

The economic and psychological damage caused by high oil and gasoline prices has been a major factor in whipsawing the stock market this year.

But investors have been experiencing a choppy market for a while.

Since the Dow reached its low in October 2002, it has posted 16 positive months and 14 negative months.