Stocks slipped on Wall Street a day after their worst session since August as fears that unrest in Libya could spread to other oil-producing nations in the region and choke off exports pushed safe-haven government debt higher.

Brent crude futures in London climbed above $110 a barrel while US crude rose to highs last seen in October 2008.

US light sweet crude oil rose $2.20 to $97.62 a barrel, and Brent rose $4.23 to $110.01.

“If we lose Libyan production, then you will have to replace around 1.6 million barrels per day of very good quality crude, which would introduce logistical implications and have a cost,” said Credit Agricole CIB analyst Christophe Barret.

Traders said prospects of higher inflation and interest rates took center stage in currency markets, pushing aside concerns about political tensions in North Africa.

Copper, often a barometer of economic demand, fell to the lowest levels in nearly a month on worries inflation could slow down global economic recovery. The metal has slipped nearly 7 percent from record highs at $10,190 a ton earlier in the month

The MSCI world equity index was down 0.5 percent.

The Dow Jones Industrial Average was down 44.08 points, or 0.36 percent, at 12,168.71. The Standard & Poor’s 500 Index was down 3.88 points, or 0.29 percent, at 1,311.56. The Nasdaq Composite Index was down 17.24 points, or 0.63 percent, at 2,739.18.

Benchmark 10-year Treasury notes pared early losses and moved slightly into positive territory as lower stocks bolstered the safe-haven allure of US government debt.

The benchmark 10-year US Treasury note was up 5/32 in price to yield 3.44 percent.

The euro rose to its highest in more than two weeks, spurred by an unexpected rise in the sale of previously owned US homes, although home prices tumbled to the lowest in nearly nine years.

Gold topped $1,400 an ounce on Wednesday. Spot gold was bid at $1,411.10 an ounce at 1600 GMT, against $1,399.20 late in New York on Tuesday. US gold futures for April delivery rose to $1,403.3 an ounce.

A day earlier, risk aversion lifted bullion to its highest since Jan. 4, topping $1,410 an ounce on worries about escalating tensions in the Middle East and north Africa.

A 2.4-percent rise in gold last week raised concerns the metal was at unsustainable levels, but news from Libya supported prices as leader Muammar Qaddafi vowed to crush a mounting revolt against his four decades of rule.

“It is dominated by the Middle East fears and the weaker dollar,” Standard Bank analyst Walter de Wet said of the market.

“We think we could easily test the highs again for gold,” he added. “It could go all the way to $1,440 till it starts looking a bit stretched from a fundamental perspective.” The metal set a record $1,430.95 in December last year.

Gold earlier hit a session high of $1,413.70 as the dollar weakened after US existing home sales data. The data showed a rise in home sales but a fall in house prices.

A weaker dollar attracts non-U.S investors to dollar-priced metals.