More of the same for the market: Oil up, stocks down
Another day of rising oil prices Monday meant another day of falling stock prices.
Amid reports of intensified fighting in Libya, concern is growing that the disruption in the country’s crude-oil production could last far longer than initially expected. That pushed crude oil as high as $118.50 a barrel, its highest level since Sept 2008.
In a roller-coaster session, the Dow Jones industrial average closed down 79.85 points, or 0.7%, to 12,090.03. The Standard & Poor’s 500 was off 0.8%, and the Nasdaq composite fell 1.4%.
The Dow and other major indexes started the day in positive territory but began falling about a half-hour into trading. The market recouped some of its losses in the final hour. The Dow had been off 128 points at its low point.
Rising oil prices are stoking fears of inflation. Investors are worried that companies might raise prices to guard profit margins in the face of higher energy costs, which could dent the nascent U.S. economic recovery.
“With the economy struggling along, the last thing this economy needs is a tax hike, and that’s what you get with higher oil prices and instability in supply,” said A.C. Moore, chief investment strategist at Dunvegan Associates Inc. in Santa Barbara. “Those are real prices people have to pay when they go to the grocery store or the gas pump.”
Semiconductor stocks slumped on a downgrade by Wells Fargo & Co., which slashed its rating on the chip sector to “market weight” from “overweight.” Wells said in a research note that the move was “more an indication of a more moderate though still optimistic view of the sector rather than any active concern about the chip stocks as a group.”
But investors were in no mood for nuance. The SOX semiconductor index slipped almost 3%. Intel was off nearly 1.7%.
-- Walter Hamilton