Wall Street closed mostly lower Tuesday after a dip in oil prices failed to keep investors from fretting over the economic effects of high...
NEW YORK — Wall Street closed mostly lower Tuesday after a dip in oil prices failed to keep investors from fretting over the economic effects of high energy costs.
The Dow Jones industrial average rose 9.44 to 12,289.76, after moving in and out of positive territory throughout the day.
Microsoft, one of the 30 Dow stocks, rose 18 cents to close at $27.89 a share. Boeing, also a Dow stock, fell 28 cents to $73.67.
Broader stock indicators declined. The Standard & Poor’s 500 index fell 3.32 to 1,358.44, and the Nasdaq composite index fell 10.52 to 2,448.94.
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Crude oil’s retreat below $132 a barrel did encourage some investors to search for bargains in stocks created by recent plunges. The financial sector, for one, saw strong demand after taking a beating Monday when Lehman Brothers reported a larger-than-expected quarterly loss.
But the overall stock market was volatile, with investors flummoxed about the direction of the economy. Federal Reserve Chairman Ben Bernanke late Monday said that while a substantial downturn seems unlikely, inflation risks are growing.
His remarks raised expectations that the central bank might raise interest rates later this year to curb inflation; more expensive borrowing could jeopardize an economic rebound.
And although investors got some temporary relief from the oil market Tuesday, they remain concerned that high energy prices will not just aggravate inflation but also stymie consumer spending and, in turn, economic growth.
The Fed has been worried that elevated commodities prices might curb consumers’ appetite to buy discretionary items.
However, “If you bet against the consumer over the past several years, you would’ve been wrong. The consumer has held up surprisingly well. However, at some point there is a breaking point. I think some people believe we may be approaching that,” said Chris Colarik, a portfolio manager at Glenmede Investment Management in Philadelphia.