Surging oil prices prompted new worries about the economy and sent stocks lower yesterday as investors locked in profits from the market's...
NEW YORK — Surging oil prices prompted new worries about the economy and sent stocks lower yesterday as investors locked in profits from the market’s recent rally. The concerns over oil overshadowed a strong report on manufacturing orders.
The Dow Jones industrial average fell 45.88 to 10,457.80.
Microsoft, one of the 30 Dow stocks, slipped 4 cents to close at $25.71 a share. Boeing, also a Dow stock, slid 80 cents to $61.45.
Broader stock indicators also gave ground. The Standard & Poor’s 500 index lost 4.06 to 1,190.01, and the Nasdaq composite index dropped 11.50 to 2,050.12. The Nasdaq snapped an eight-session streak of gains.
Most Read Stories
- Prosecutor reviewing sex-abuse allegations against ‘Deadliest Catch’ star Sig Hansen
- The results are in: Here's where the new Dick's Drive-In will be
- Knife-wielding man in custody after downtown standoff VIEW
- Amazon tries to bag a big chunk of grocery market with Seattle pickup locations WATCH
- Career advice: End affair with boss, then apply for promotion | Dear Carolyn
Crude futures rose sharply after the government reported a 1.6 million barrel drop in its oil inventories. The news created concerns about supply as the summer driving season begins. After rising as high as $51.60 a barrel during the session, crude futures settled at $50.98 a barrel, up $1.31, on the New York Mercantile Exchange.
The concerns over oil eclipsed a report from the Commerce Department that said orders for durable goods — big-ticket items designed to last at least three years — rose 1.9 percent last month, far more than the 1.5 percent analysts had expected. The report cheered investors worried about a slowdown in consumer demand.
“Oil is a concern, but the economy still appears to be in very good shape,” said Brian Belski, market strategist at Piper Jaffray. “In stocks, what we’re seeing is a fairly normal respite after last week’s rally. I still think we’re ready for a surprising summer rally ahead.”
New home sales hit an all-time high last month but were less than Wall Street had expected. Annualized sales rose to 1.316 million homes, up from 1.313 in March but less than the 1.328 million analysts had forecast. The numbers were an improvement but also gave investors hope that the recent surge in sales would moderate, rather than nose dive.
Analysts noted that the drop in prices should be expected after last week, when three major indexes rose more than 3 percent.
“When you’re up this much and you see oil rise or something else happens that doesn’t fit into this mental model of good news, you’re going to take some chips off the table,” said Jack Caffrey, equity strategist for J.P. Morgan Private Bank. “It’s heretical to say it, but this kind of selling is healthy in the long run.”