Dollar rises in big August surge and oil prices fall

By Herbert Lash

NEW YORK (Reuters) - The dollar rose on Friday as it ended its best month in a over a decade, helping push oil prices lower as damage fears eased despite projections Gustav will barrel into the United States as a dangerous category 3 hurricane.

Fifteen to 30 foot storm surges were expected to accompany Gustav as early next week when it slams the U.S. Gulf Coast, home to major parts of the U.S. energy complex.

U.S. Treasury debt prices fell, hit by economic data that was stronger than expected and signs of rising inflation in a key indicator.

But U.S. stocks fell hard after Dell warned that companies are cutting technology spending worldwide, while the data added to market jitters before a long U.S. Labour Day weekend.

"The market is just very fragile. There's not a lot of support going into the Labour Day weekend," said Gary Wolfer, senior portfolio manager at Univest Wealth Management & Trust in Souderton, Pennsylvania.

"The Dell news has compounded the downside move. When you have a non-financial company missing its earnings, that's disconcerting to the market," Wolfer said.

The Dow Jones industrial average closed down 171.47 points, or 1.46 percent, at 11,543.71. The Standard & Poor's 500 Index fell 17.93 points, or 1.38 percent, at 1,282.75. The Nasdaq Composite Index slid 44.12 points, or 1.83 percent, at 2,367.52.

European shares rose, and differing views about the pace of inflation in Europe and the United States sent debt prices on either side of the Atlantic in opposite directions.