New York  - Major US stock indices plunged on Wednesday as the price of oil climbed, financial shares plummeted and the Federal Reserve warned the economy has remained sluggish over the last two months.

The US central bank said economic activity had "remained generally weak" in late April and May, according to its survey compiled from the reports of 12 district branches around the country.

The so-called Beige Book report said consumer spending had slowed in the past months due to rising energy and food prices.

Crude oil climbed more than 5 dollars to 136.38 dollars per barrel on a US government report that showed stockpiles dropped more than anticipated on the week.

Shares of financial companies were hit hardest on the day, falling a combined 3.3 per cent on reports that some have underestimated losses stemming from the subprime mortgage crisis.

The blue-chip Dow Jones Industrial Average plunged 205.99 points, or 1.68 per cent, to 12,083.77. The broader Standard & Poor's 500 was down 22.95 points, or 1.69 per cent, to 1,335.49. The technology- heavy Nasdaq Composite Index fell 54.93 points, or 2.24 per cent, to 2,394.01.

The US currency dropped against the euro to 64.29 euro cents from 64.66 euro cents on Tuesday. The dollar also lost against the Japanese currency to 106.97 yen from
107.37 yen.

Gold rose 13.35 dollars to 880.35 dollars per fine ounce. (dpa)