Oil threat remains as markets reopen, but rice gets cheaper

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A few items of note as U.S. markets reopen today after the holiday weekend:

--Has oil just greased the skids for stocks? Record crude prices had Wall Street reeling last week, and it’s hard to imagine equity buyers finding their footing this week unless the oil price gusher shows signs of easing, at around $132 a barrel here.

Phil Roth, technical market analyst at Miller, Tabak & Co. in New York, says that $130-plus oil just deepens the underlying fear investors have about jumping into stocks: the feeling that the U.S. consumer is tapped out, leaving little hope for an economic rebound in the near term and therefore threatening the expected second-half recovery in corporate earnings.

‘This is not only about oil,’ Roth says. ‘That’s the trap. We’re in an economic slowdown, and the consumer is in a box because he can’t spend his home equity anymore.’

--Maybe oil will take a hint from the rice market? Bloomberg reports here that surging rice prices have suddenly reversed as some key producers, including Cambodia, indicate they’ll ease export bans to boost global supplies. Vietnam, the world’s second-largest rice exporter, also may soon lift a ban on new overseas shipments, according to Bloomberg.

--No justice for investors trapped in auction-rate securities? The credit crunch has left thousands of investors stranded in so-called auction-rate issues, long touted by brokers as a money market substitute. But suing for damages via class-action cases may be a bust, Bloomberg reports, in part because investors still are earning interest on their money even if they can’t cash out. Full story here.