US STOCKS-Market falls further on record oil prices

(Updates with market extending losses)

NEW YORK, May 16 (Reuters) - U.S. stocks extended losses on Friday and the Nasdaq dropped more than 1 percent as a fresh run-up in oil prices to record territory added to concerns over the impact of soaring fuel costs on consumers and businesses.

U.S. crude for June delivery CLc1 extended its record-setting streak, hitting an all-time high of $127.82 a barrel on the New York Mercantile Exchange.

The Dow Jones industrial average .DJI fell 88.18 points, or 0.68 percent, to 12,904.48. The Standard & Poor's 500 Index .SPX dropped 8.69 points, or 0.61 percent, to 1,414.88. The Nasdaq Composite Index .IXIC slid 28.29 points, or 1.12 percent, to 2,505.44. (Reporting by Ellis Mnyandu; Editing by James Dalgleish)