U.S. stock were sharply lower on Friday as a possible debt default at a Dubai state-owned conglomerate sparked fears of renewed financial turmoil.

Financial stocks were among the hardest hit, with both Bank of America Corp and Citigroup Inc down more than 3 percent. The Select Sector SPDR Financial ETF lost 2 percent.

On Wednesday, Dubai said it would ask creditors of state-owned Dubai World and builder Nakheel, with $80 billion in total debt, for a standstill agreement on their debt as a first step toward restructuring.

This is an attention-getter in an environment where investors have become more complacent, said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.

Dubai is deeply connected with the global community, and people are worried about a domino effect with other points of the financial system.

The Dow Jones industrial average <.DJI> fell 187.75 points, or 1.79 percent, to 10,277.65. The Standard & Poor's 500 Index <.SPX> tumbled 23.41 points, or 2.08 percent, to 1,087.53. The Nasdaq Composite Index <.IXIC> dropped 45.83 points, or 2.11 percent, to 2,130.14.

The U.S. dollar rose 0.6 percent against a basket of currencies <.DXY>, while January crude futures dropped 4.2 percent. Dow component Exxon Mobil Corp shares fell 1.8 percent to $75.11.

Black Friday marks the unofficial start to the holiday shopping period, and investors will be watching store cash registers for insight into consumer spending, which accounts for about 70 percent of the economy.

The S&P retail index <.RLX> fell 1.7 percent

(Editing by Jeffrey Benkoe)

New Jersey Investment Dubai