Wall Street fell sharply Wednesday as oil prices rebounded, aggravating concerns that inflation may lead the world's central banks to raise interest rates. The Dow Jones industrial average fell more than 150 points.

Investors have been uneasy about oil prices, which at times surged above US$137 a barrel on the New York Mercantile Exchange after dropping a day earlier. Having breached US$139 a barrel last week, record-high crude has increasingly posed both an inflationary risk and a threat to growth.

In mid-afternoon trading, the Dow Jones industrial average fell 153.07, or 1.25 per cent, to 12,136.69.

The biggest loser among the 30 Dow components was Alcoa Inc, which fell $2.61, or 6.1 per cent, to US$40.11 after a JPMorgan analyst said the aluminium producer is not planning to sell itself or spin off part of its business.