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NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday, falling for a second session, after oil prices topped $133 a barrel and the Federal Reserve gave a gloomy economic outlook.

The Dow Jones industrial average (INDU) lost 227 points, or 1.8%. The broader Standard & Poor's 500 (SPX) index fell 1.6%, while the tech-heavy Nasdaq composite (COMP) lost 1.8%.

Stocks fell in the morning as oil prices spiked on a weaker-than-expected weekly supply report. But the selloff accelerated in the afternoon following the 2 p.m. ET release of the minutes from the last Fed meeting.

Included with the minutes was the Fed's 2008 forecast, which spooked investors.

"Most of the selling is about oil," said Timothy Ghriskey, chief investment strategist at Solaris Asset Management. "We've all been surprised that the steady march up in crude hasn't impact the stock market more before now."

Ghriskey said that there were also technical factors stemming from the recent rally that made it likely stocks would see a correction. "And the Fed minutes and forecast didn't help," he added. "They basically indicated that the Fed is on hold right now."

Thursday morning brings the weekly jobless claims report and a speech from Federal Reserve Governor Randall S. Kroszner on the outlook for the mortgage markets.

Oil hits new record: U.S. light crude oil for July delivery set a closing record of $133.17 in New York Mercantile Exchange trading, up more than $4 a barrel - and then proceeded to march to another record intraday high of $134.10 in electronic trading after the settlement.

Oil prices spiked after the weekly inventories report showed a surprise drop in crude and gasoline supplies and a weaker-than-expected buildup in distillates, used in heating oil.

Oil has been climbing lately amid ongoing supply concerns and the weakness in the dollar, which makes dollar-traded commodities such as oil less expensive.

Gas hits 14th straight record: The national average price for a gallon of regular unleaded gas rose to a record $3.807 from the previous day's high of $3.80, according to AAA.

Company news: Time Warner (TWX, Fortune 500), the parent company of CNNMoney, will receive a $9.25 billion dividend as part of its legal and structural separation from Time Warner Cable.

After the close Tuesday, Hewlett-Packard (HPQ, Fortune 500) reported a small rise in quarterly profit that matched preliminary figures it announced last week. Shares fell 3.6% Wednesday.

In addition to HP (HP), AIG (AIG, Fortune 500), Alcoa (AA, Fortune 500), American Express (AXP, Fortune 500), Boeing (BA, Fortune 500), Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500) were among the other big Dow losers.

The only Dow gainers were the oil components, Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500).

AMR (AMR, Fortune 500) shares slumped 24% after its American Airlines unit said it was cutting capacity by 11% to 12% in the fourth quarter due to record-high oil prices. Other airline stocks slipped as well, with the Amex Airline index losing almost 12%.

Intuit (INTU), the maker of tax preparation software, reported higher quarterly sales and earnings late Tuesday that topped estimates. The company also forecast full year sales and earnings that are above current expectations. Shares advanced 3.4% Wednesday.

Market breadth was negative. On the New York Stock Exchange, losers topped winners seven to three on volume of 1.39 billion shares. On the Nasdaq, decliners beat advancers by over two to one on volume of 2.22 billion shares.

Other markets: The dollar fell versus the euro and yen.

Treasury prices slumped, raising the yield on the 10-year note to 3.81% from 3.77% late Monday. Bond prices and yields move in opposite directions.