Rising oil prices plagued Wall Street again yesterday as the Dow Jones industrial average suffered its second straight 100-point-plus loss...
NEW YORK — Rising oil prices plagued Wall Street again yesterday as the Dow Jones industrial average suffered its second straight 100-point-plus loss, ending a week dominated by concerns that energy costs would soon eat into corporate profits. All three indexes finished the week substantially lower.
The Dow fell 123.60 to 10,297.84, after plunging more than 166 points the previous session. For the week, the Dow lost 3.1 percent.
Microsoft, one of the 30 Dow stocks, fell 27 cents to close at $25.04 a share, unchanged from last Friday’s close. Boeing, also a Dow stock, stumbled $1.27 to $60.59, down 6.2 percent from last Friday.
The broader gauges, which also posted big losses Thursday, were down as well. The Standard & Poor’s 500 index dropped 9.16 to 1,191.57, falling 2.1 percent for the week. The Nasdaq composite index lost 17.39 to 2,053.27, dropping 1.8 percent for the week.
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Investors overlooked decent economic news, choosing instead to focus on oil. Transportation and manufacturing companies — considered the most oil-dependent — were hardest hit, though the selling was spread throughout the market as crude-oil futures threatened to top the psychologically significant $60-per-barrel barrier for the second day in a row.
“The crude situation is a big concern right now,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “People aren’t really looking at the economic numbers.”
Even the economic data, while mostly positive, raised some concerns. The Commerce Department reported a 5.5 percent rise in orders to U.S. factories for big-ticket manufactured goods last month, but much of that was due to a surge in demand for commercial aircraft. With transportation orders removed, durable-goods orders fell 0.2 percent in May, the third decline in the past four months.
Also adding some volatility to the market, institutional investors were adjusting their portfolios to reflect the annual rebalancing of the Russell indexes.
Crude-oil futures were up 42 cents at $59.84 per barrel on the New York Mercantile Exchange, coming one day after oil prices surged past $60 per barrel for a new intraday high.
With few earnings reports and a relative dearth of economic news, oil remained the market’s focus for nearly the entire week. The drop in stock prices Thursday effectively ended, at least for the short term, the market’s recent rally.
In other economic news, sales of new homes climbed to the second-highest level in history, but median home prices fell sharply in May. The government reported that sales of new single-family homes rose by 2.1 percent last month to a seasonally adjusted annual rate of 1.3 million homes, but the median cost dropped 6.5 percent to $217,000.
However, the economic data simply weren’t positive enough — or broad enough — to make a dent in investors’ pessimism over the future effects of crude prices.
“People need a good reason to buy stocks, but they always have reasons to sell,” said John Waterman, chief investment officer at Rittenhouse Asset Management. “We’re seeing mixed economic data, high oil prices, so where do you put your money? Investors chase momentum, and there’s none here.”