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Stocks waver as government shutdown looms
Source: Agencies |
April 9, 2011, Saturday
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A SURGE in oil and the threat of a government shutdown weighed on stocks yesterday.
Investors kept one eye on Washington, where Republicans and Democrats were in the final day of talks to reach a budget agreement. Without a deal, the federal government is expected to stop all services that aren't considered essential. That means most economic reports would be suspended. Sales of debt would continue.
Benchmark crude oil jumped US$2.49 to settle at US$112.79 per barrel on the New York Mercantile Exchange. That's the highest price since Sept. 22, 2008.
Over the past two months, most stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.
The Dow Jones industrial average lost 29.44 points, or 0.2 percent, to close at 12,380.05. The Standard & Poor's 500 index slipped 5.34, or 0.4 percent, to 1,328.17. The Nasdaq composite lost 15.72, or 0.6 percent, to 2,780.42.
The Dow ended the week flat, while the S&P and Nasdaq lost 0.3 percent. All three indexes made gains in the previous two weeks.
Transportation companies fell. Delta Air Lines Inc. dropped 3.9 percent, and United Parcel Service Inc. lost 1 percent. Energy companies rose, leading the 10 industry groups within the S&P 500. Occidental Petroleum Corp. rose 2.6 percent, and Anadarko Petroleum Corp. rose 1.6 percent.
Todd Salamone, director of research at Schaeffer's Investment Research, said most stocks tend to rise along with oil prices over the long term. "The recent breakdown in the pattern has largely been due to fears of supply shocks," he said. "But the oil rally could also be attributed to a stronger world economy."
Expedia Inc. rose 13 percent, the most in the S&P 500 index, after it said it would split off its TripAdvisor.com division.
More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.7 billion shares.
Investors kept one eye on Washington, where Republicans and Democrats were in the final day of talks to reach a budget agreement. Without a deal, the federal government is expected to stop all services that aren't considered essential. That means most economic reports would be suspended. Sales of debt would continue.
Benchmark crude oil jumped US$2.49 to settle at US$112.79 per barrel on the New York Mercantile Exchange. That's the highest price since Sept. 22, 2008.
Over the past two months, most stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.
The Dow Jones industrial average lost 29.44 points, or 0.2 percent, to close at 12,380.05. The Standard & Poor's 500 index slipped 5.34, or 0.4 percent, to 1,328.17. The Nasdaq composite lost 15.72, or 0.6 percent, to 2,780.42.
The Dow ended the week flat, while the S&P and Nasdaq lost 0.3 percent. All three indexes made gains in the previous two weeks.
Transportation companies fell. Delta Air Lines Inc. dropped 3.9 percent, and United Parcel Service Inc. lost 1 percent. Energy companies rose, leading the 10 industry groups within the S&P 500. Occidental Petroleum Corp. rose 2.6 percent, and Anadarko Petroleum Corp. rose 1.6 percent.
Todd Salamone, director of research at Schaeffer's Investment Research, said most stocks tend to rise along with oil prices over the long term. "The recent breakdown in the pattern has largely been due to fears of supply shocks," he said. "But the oil rally could also be attributed to a stronger world economy."
Expedia Inc. rose 13 percent, the most in the S&P 500 index, after it said it would split off its TripAdvisor.com division.
More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.7 billion shares.
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