Stocks plummeted yesterday as heightened fears of another hurricane hitting the Gulf Coast sent oil prices racing past $67 a barrel and...
NEW YORK — Stocks plummeted yesterday as heightened fears of another hurricane hitting the Gulf Coast sent oil prices racing past $67 a barrel and investors grew anxious about the Federal Reserve’s upcoming interest-rate meeting.
At the close of trading, the Dow Jones industrial average dropped 84.31 to 10,557.63. The Dow was down as much as 120.69 during the session.
Microsoft, one of the 30 Dow stocks, slipped 7 cents to close at $26 a share. Boeing, also a Dow stock, fell 70 cents to $64.10.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 6.89 to 1,231.02, and the Nasdaq composite index sank 15.09 to 2,145.26.
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Crude oil made its biggest one-day gain ever, even as OPEC neared a consensus on selling 2 million additional barrels a day to offset a potential supply shortage from recent refinery shutdowns. On the New York Mercantile Exchange, a barrel of light crude jumped $4.39 to $67.39, as gasoline futures climbed 24 cents to $2.04 a gallon.
Wall Street became increasingly uneasy as surging energy prices threatened consumer spending. Investors also awaited the Fed’s decision today whether to raise rates or halt its string of increases to mitigate an economic slide after Hurricane Katrina.
With an intensifying Tropical Storm Rita nearing Florida’s tip and poised to hammer the Gulf Coast just weeks after Katrina’s devastation, the market retreated heavily late in the session amid light trading volume.
“Front and center would be concerns of the storm approaching [today], of which you’re seeing crude oil trading up $4,” said Steven Goldman, chief market strategist at Weeden, who noted a steep decline in oil prices at midday.
Although Wall Street is uncertain about what the Fed’s decision is likely to be, many analysts are predicting the central bank will continue lifting rates to stem inflation and will keep that as its main priority despite the widespread economic ripple left in Katrina’s wake. The Fed’s policy announcement is expected today shortly after 11:15 a.m. local time.
“I don’t see where they’re going to be able to back down with inflation increasing the way it is and oil rising,” said Bill Groenveld, head trader at vFinance Investments.
Groenveld also said Rita was another concern for the market as it approached the southern end of Florida en route to the Gulf of Mexico.