NEW YORK - The stock market was hit hard Friday, capping a third week of declines, as investors reacted to a steep drop in oil prices and a jump in the value of the dollar.

Utilities, companies that make basic materials like steel, and major exporters had the biggest declines.

The sell-off came at the end of a volatile week and sets the stage for a Federal Reserve policy meeting next week. Investors will be watching closely for clues about the central bank's views on the economy and interest rates.

The Dow Jones industrial average fell 145.91 points, or 0.82 percent, to 17,749.31. The Standard & Poor's 500 index lost 12.55 points, or 0.61 percent, to 2,053.40, and the Nasdaq composite lost 21.53 points, or 0.44 percent, to 4,871.76.

Oil dropped sharply after the International Energy Agency said prices had further to fall because supplies were continuing to rise. Benchmark U.S. crude fell $2.21 to close at $44.84 a barrel in New York. Oil is now within 40 cents of its low for the year, and its lowest level in six years, after a drop of 10 percent this week. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $2.41 to close at $54.67 a barrel in London.

In the bond market, U.S. government bond prices didn't move much. The yield on the 10-year Treasury note was unchanged at 2.12 percent.

In other commodity markets, precious and industrial metals futures closed little changed on the day. Gold edged up 50 cents to $1,152.40 an ounce, silver fell two cents to $15.49 an ounce, and copper was flat at $2.66 a pound. In other energy trading, natural gas fell 0.7 cents to close at $2.727 per 1,000 cubic feet.