Higher oil prices and news of slowing growth in the service sector pulled stocks lower Monday. The Dow Jones industrial average lost 42...
NEW YORK — Higher oil prices and news of slowing growth in the service sector pulled stocks lower Monday.
The Dow Jones industrial average lost 42.50 to 10,835.01.
Microsoft, one of the 30 Dow stocks, slipped 16 cents to close at $27.85 a share. Boeing, also a Dow stock, fell 24 cents to $69.20.
Broader stock indicators also were lower. The Standard & Poor’s 500 index fell 2.99 to 1,262.09, and the Nasdaq composite index dropped 15.73 to 2,257.64.
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Inflation worries again plagued Wall Street as crude futures pierced $60 per barrel, reinforcing concerns that the Federal Reserve might continue lifting interest rates to stem inflation from increased energy costs.
Last week, the market broke a five-week rally after a string of government reports painted a rosier picture of the economy than many had been predicting.
That economic strength could justify more interest-rate increases and halt Wall Street’s year-end advance, said Bill Groenveld, header trader at vFinance Investments.
“Whether the market flattens out for the next couple of weeks, there’s always going to be uncertainty about the future,” Groenveld said. “It’s going to be a real news-sensitive market over the next quarter.”
Stocks retreated after the Institute for Supply Management reported a slowdown in the service sector despite rebounds in new orders and employment. Investors, however, shrugged off a drop in the prices paid index, which bodes well for inflation.
Forecasts for the Northeast’s first big snowstorm triggered a run-up in energy prices. A barrel of light crude added 59 cents to settle at $59.91 on the New York Mercantile Exchange, but natural gas, a common heating fuel, tumbled 27.1 cents to $13.66 per 1,000 cubic feet after surging more than 50 cents during in the session.
With little economic data expected this week, Wall Street likely will face several days of profit-taking following a monthlong rally that boosted the Dow about 7 percent from its October lows, said Michael Sheldon, chief market strategist at Spencer Clarke.
Sheldon said the market’s advance could be derailed entirely by escalating oil prices, higher yields on long-term bonds, and indications that corporate earnings will fall short of expectations.
“But until we see several days of significant selling and increased volume, we have to give the benefit of the doubt to the bulls,” Sheldon said.
The ISM said Monday that its non-manufacturing index pulled back to 58.5 in November from an October reading of 60. Any level above 50 still implies growth.