Stocks closed mostly lower today after rising oil prices and ongoing worries about the financial sector gave investors little reason to...
NEW YORK — Stocks closed mostly lower today after rising oil prices and ongoing worries about the financial sector gave investors little reason to buy.
The Dow Jones industrial average slipped 0.33 to close at 11,842.36.
Microsoft, one of the 30 Dow stocks, declined 26 cents to close at $27.97 a share. Boeing, also a Dow stock, fell 23 cents to $75.60.
Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 0.07 to 1,318.00, and the Nasdaq composite index fell 20.35 to 2,385.74.
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Disappointment that Saudi Arabia is not boosting production by more than 200,000 barrels a day sent oil prices higher. Light, sweet crude rose $1.38 to settle at $136.74 a barrel on the New York Mercantile Exchange.
With little economic data arriving, investors have little to focus on but the price of oil and the Fed’s two-day meeting, which concludes Wednesday. Most investors expect the Fed to keep its key federal-funds rate on hold, and in its economic statement, emphasize the rising threat of inflation.
Denis Amato, chief investment officer at Ancora Advisors in Cleveland, questions how the Fed will balance weakness in areas of the economy like the financial sector with concerns about the weak dollar and the rising inflation it causes.
“We think the Fed is sort of in a quandary here … if they raise rates, they run the risk of having some negative impact on the economy, and if they don’t raise rates, they run the risk of negatively influencing the dollar. That trend is driving up oil, which is impairing the economy,” he said.
The modest moves today follow a rough week that ended with a plunge Friday amid worries about the financial and automotive sectors and a resurgence in oil prices. The major indexes dropped by more than 1.5 percent Friday, and the Dow fell more than 200 points to close at its lowest level since March.
The financial sector’s woes continue: Citigroup is in the midst of cutting its investment banking staff by 10 percent, and Goldman Sachs Group is also eliminating jobs, The Financial Times reported. Citigroup fell 75 cents to $18.55, and Goldman fell $5.18 to $178.59.
Amato contends that troubles in sectors like the financials are severe enough that they will spill over to other areas of the economy and send the broader stock market lower.
“You can’t have a functioning economy with all the banks under that much extreme pressure,” he said.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 831.8 million shares.
Overseas, Japan’s Nikkei stock average fell 0.6 percent. Britain’s FTSE 100 rose 0.8 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 edged up 0.05 percent.