Wall Street tumbled today as the price of a barrel of oil soared to a record near $124 and touched off concerns that the stock market's...
NEW YORK — Wall Street tumbled today as the price of a barrel of oil soared to a record near $124 and touched off concerns that the stock market’s recent gains might have been premature as consumers grapple with rising energy and food costs. The major stock-market indexes each lost more than 1.5 percent, with the Dow Jones industrial average declining by more than 200 points.
The Dow fell 206.48, or 1.59 percent, to 12,814.35, after fluctuating early in the session.
Microsoft, one of the 30 Dow stocks, lost 49 cents to close at $29.21. Boeing, another Dow stock, was down $1.60 to end the day at $84.55.
Broader stock indicators also declined. The S&P 500 fell 25.69 to 1,392.57, and the Nasdaq composite index fell 44.82 to 2,438.49.
Most Read Business Stories
- 6 Dr. Seuss books won't be published for racist images
- Frontier cancels flight, citing maskless passengers
- Biden vows enough vaccine for all US adults by end of May
- Amazon sued by Black cloud-computing manager over alleged racial discrimination and sexual harassment
- Texas becomes biggest US state to lift COVID-19 mask mandate
Sharp gains in commodities prices have drawn fresh attention from investors worried that consumers — the lifeblood of the U.S. economy — will be forced to pare discretionary spending to keep up with increasing costs for necessities.
Oil prices have doubled over the past year, causing gasoline prices to surge further into record terrain and strap consumers, who drive more than two-thirds of economic activity, with another financial burden.
Wall Street slid amid a cacophony of worries about the effects of rising prices. Kansas City Federal Reserve President Thomas Hoenig in a speech late Tuesday pointed to inflation as his main concern. Treasury Secretary Henry Paulson said in an interview with The Associated Press today that while the worst of the credit crisis might have passed, rising gas prices will dampen the benefits from the 130 million economic stimulus checks that the government is distributing.
While some observers say recent stock market gains had come too quickly anyway, others contend the market’s declines reflect more serious worries about the difficulties blanketing consumers.
Ed Peters, chief investment officer at PanAgora Asset Management in Boston, said, “It is going to be a drag if we continue to get rising prices. The oil price is just symptomatic of a broader trend.”
But Stephen Carl, head of equity trading at The Williams Capital Group, said that while rising oil prices appeared to rattle investors, many had also seen sizable gains from stocks in recent weeks and wanted to preserve their profits.
“Perhaps we fall away here for a few sessions,” he said, noting that the Standard & Poor’s 500 index’s rebound to the 1,400 level might have been too hasty for some investors.