Crude oil rose last week after Israeli Deputy Prime Minister Shaul Mofaz said Friday that all options are open as Iran drives toward a ``major breakthrough'' in its nuclear weapons program. Oil climbed more than $4 a barrel in intraday trading as Mofaz's comments fueled speculation that the U.S. or Israel may attack Iran. Iranian President Mahmoud Ahmadinejad said OPEC's second-largest producer will ``resist with force'' any outside efforts to slow its nuclear program. Iran with a nuclear weapon would pose an ``unacceptable'' danger and be ``an existential threat'' to Israel, Mofaz said.

Similar speculation of an attack on Iran contributed to the oil-price rally that took futures to a record $147.27 a barrel on July 11. Iran previously has threatened to blockade the Strait of Hormuz, through which a quarter of the world's crude is exported, if its nuclear facilities are targeted. It pumped about 3.85 million barrels of oil a day in June. Iranian Supreme Leader Ayatollah Ali Khamenei, the country's highest authority, said this week that his country will push forward with its nuclear program, which Iranian officials say is designed for energy generation and other peaceful purposes.

Crude oil for September delivery rose to $125.10 a barrel. Earlier, it touched $128.60 a barrel. Oil rose $1.84, or 1.5%, this week. It was the first weekly increase in four. Futures have slipped more than $22 a barrel, or 15%, from the record on signs of declining demand in the U.S., which consumed about 24% of the world's crude in 2007. They fell 11% in July, the biggest one-month decline since December 2004. Brent crude oil rose to $124.18 a barrel.

Gold fell as better-than-expected U.S. jobs data boosted the dollar and reduced demand for alternative assets. Gold futures fell to $917.50 an ounce. The metal dropped 2.1% for the week, the third straight weekly decline. Gold has more than doubled since 2003, as the U.S. attacked Iraq and violence in the Middle East escalated. The precious metal sometimes moves in tandem with rising geopolitical instability. Silver futures settled at $17.52 an ounce. Silver gained 17% this year, including a 0.8% rise last week. Platinum and palladium prices fell heavily on Friday as poor results from carmakers including General Motors raised fears of tumbling demand. Carmakers consume about half the world’s platinum and palladium. Platinum fell to a six-month low of $1,641.50 a troy ounce in London, down 6% on the week.

Copper fell the most in three weeks Friday as a rally in the dollar and expanding inventories of the metal increased concern that demand is waning. Copper inventories tallied by the London Metal Exchange are up 8.4% last week and are the highest since February. The price of the metal is heading for a fourth straight weekly decline. Copper dropped 0.7% for the week to $7,920 a ton.

The dollar showed increasing signs of resilience last week, hitting a one-month high against the euro as evidence mounted that the effects of the credit crisis were making themselves felt across the globe. Over the week, the dollar rose 1% against the euro, climbed 0.8% against the pound. The dollar lost ground against the yen. The currency increased for a third week against the euro, its longest stretch of gains since May 2007.

The dollar’s rally came in spite of figures on Thursday that showed that US growth came in below forecast in the second quarter and data on Friday that revealed that US unemployment rose to its highest level in more than four years in July. The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, figures from the Commerce Department showed July 31.

U.S. payrolls shrank in July for a seventh straight month, decreasing by 51,000, matching the previous month's decline, the Labor Department said yesterday in Washington. The median forecast of 79 economists was for a reduction of 75,000. The unemployment rate rose to 5.7%, the highest since March 2004, from 5.5% .

Indeed, eurozone purchasing managers’ surveys suggested that the region’s services and manufacturing sectors contracted sharply in July. The 15-nation euro fell yesterday versus the dollar as Germany's Federal Statistics Office in Wiesbaden said retail sales, adjusted for inflation and seasonal swings, dropped 1.4% in June after increasing 0.5% in the prior month. The median forecast of economists was for a decrease of 0.5%.

The pound fell to $1.9727, the lowest level since July 10, as an index of British manufacturing dropped in July to the weakest since December 1998. The Bank of England is forecast to hold its target rate at 5% on Aug. 7.

The yen rose to a two-week high against the euro Thursday as slowing global growth prompted traders to pare holdings of higher-yielding assets funded in Japan. Japan's currency rose on speculation investors reduced carry trades in which they get funds in countries with low borrowing costs and invest where returns are higher. The target lending rate of 0.5% in Japan compares with 8% in New Zealand.

Wall Street stocks fell for a second session on Friday, and trimmed already modest weekly gains, as investors wrestled with downbeat jobs data, poor results from General Motors and a bump in the price of oil. Poor results from GM, the largest carmaker in the US, added to the losses. The company said it had made a second-quarter loss of $15.5bn, four times larger than analysts expected, because of the cost of labour disputes and a slump in domestic sales. GM shares fell 7.6%. Ford shares dipped 3.1%. Over a volatile week, the Dow edged down 0.3%, the Nasdaq held its ground and the S&P 500 rose 0.3% due to mixed second-quarter earnings, a decline in the price of oil and some weak data on growth, home prices and employment.

S&P 500 company second-quarter profits have fallen 20% on average compared to a year ago. Profits have slumped about 82% at financials and more than 100% at consumer discretionary companies while energy company profits have grown by 18%. Excluding financials, average earnings on the S&P 500 rose 3%. Material stocks also fared poorly, hit by new data showing US manufacturing activity stagnated in July. Metals stocks led the materials sector down 2.6%. Titanium Metals dropped 6.8%, Nucor fell 6% and Freeport-McMoRan Copper & Gold lost 5.6%.

In healthcare, renewed safety concerns about Biogen Idec’s multiple sclerosis drug weighed on the sector. Biogen slumped 28.3%, while the sector gave up 1%. In technology, poor results from Sun Microsystems, weighed on the sector. The maker of server computers said profit fell 73%. Shares retreated 12.3%. In energy sector disappointing results from Chesapeake Energy, an independent natural-gas producer, and Chevron, the oil producer, eventually took their toll. Chesapeake lost 1.9%, Chevron dipped 0.3%.

European stocks fell Friday, erasing a weekly advance, as rebounding oil prices dragged down industrial shares and Bayerische Motoren Werke AG abandoned its profit forecast. MAN AG and Rolls-Royce Group Plc dropped as crude futures rallied above $128 a barrel. BMW, the world's largest maker of luxury vehicles, tumbled the most since February after saying ``conditions for the automobile industry have deteriorated sharply.'' BHP Billiton Plc and Anglo American Plc retreated as copper and aluminum prices fell. Deutsche Boerse AG, operator of the Frankfurt exchange, declined 4.4%. London Stock Exchange Group Plc, which said Friday it will cut fees to become the ``cheapest trading venue in Europe,'' slipped 1.8%.

Japanese stocks fell Friday, capping a weekly decline, led by Sumitomo Mitsui Financial Group Inc. and NEC Corp. after both said earnings fell by half as growth slowed at home and abroad. The Nikkei recorded a 1.8% drop for the week, while the Topix fell 2% . Both gauges slumped to the lowest level since July 18. Sumitomo Mitsui, the nation's second-largest bank by market value, plunged the most in six months as bad-loan provisions reduced first-quarter net income. NEC, the country's largest personal-computer maker, posted its steepest decline in two decades as a drop in network equipment orders eroded profit. Pacific Holdings Co., Japan's third-largest real-estate asset manager, dropped by its daily limit amid speculation banks will tighten lending.