NEW YORK — Stocks skidded yesterday in the devastating aftermath of Hurricane Katrina, which slammed the Gulf Coast, pounding hotels and casinos, constricting oil refinery capacity and leaving insurers to cover losses estimated as high as $25 billion.

While major indexes gained Monday when the storm weakened, Wall Street's spirits sank yesterday after the nation's top disaster relief official called the hurricane "catastrophic," oil prices climbed and stocks in affected sectors continued to drop. The Dow Jones industrial average was down more than 100 points in late afternoon trading, but narrowed its losses toward the close.

"This is the kind of reaction everyone expected yesterday," said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.

Crude oil futures hit record highs on fears that already tight refinery capacity would be further constrained as TV reports asserted widespread refinery shutdowns along the Gulf Coast and the Coast Guard said seven rigs were adrift in the Gulf of Mexico. A barrel of light crude settled at $69.81, up $2.61 a barrel on the New York Mercantile Exchange.

Notes released from the Federal Reserve's last policymaker meeting further aggravated equity investors. The notes signaled that rate hikes could continue into 2006 and said inflation had "ticked up" since the policymakers' previous meeting.

The Dow closed down 50.23, or 0.48 percent, at 10,412.82.

Declining issues outnumbered advancers by more than 9 to 7 on the New York Stock Exchange, where consolidated volume was 1.97 billion shares, up from 1.63 billion at the same time Monday.