Wall Street's fixation with oil prices left stocks little changed yesterday, although investors managed to react stoically to the government's...
NEW YORK — Wall Street’s fixation with oil prices left stocks little changed yesterday, although investors managed to react stoically to the government’s report of a drop in crude inventories.
The Dow Jones industrial average fell 11.74 to 10,587.93.
Microsoft, one of the 30 Dow stocks, declined 8 cents to close at $25.07 a share. Boeing, also a Dow stock, gained 35 cents to $63.13.
Broader stock indicators were up. The Standard & Poor’s 500 index was up 0.27 at 1,213.88, and the Nasdaq composite index rose by 0.96 to 2,092.03.
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Oil futures traded above $59 a barrel after the U.S. Department of Energy released data showing inventories of crude fell 1.58 million barrels for the week. The drop, while lower than expected, initially rattled traders and sent stocks sliding; however, they soon recovered most of their lost ground.
“The market is searching for meaning out of the news and isn’t ready to forecast where they think oil prices will be,” said John Caldwell, chief investment strategist for McDonald Financial Group, part of KeyCorp. “It’s a reactive situation.”
A barrel of light crude settled at $58.09, down 95 cents on the New York Mercantile Exchange.
Worries linger on Wall Street that high oil prices could accelerate inflation, as businesses raise their own prices to absorb rising costs. Several airlines said yesterday they were raising fares on most domestic and international flights by about 3 percent, effective immediately, because of rising oil prices.
“People are myopically focused on higher energy prices and are ignoring the generally good fundamentals for the U.S. equity market,” said Steve Neimeth, a portfolio manager at AIG SunAmerica Asset Management.
Investors nervous about a possible economic slowdown in the United States bid bonds higher worldwide. U.S. Treasuries rose, with the yield on the 10-year note falling to 3.72 percent from 4.05 percent late Tuesday.
Stocks have traded in a narrow range for weeks in anticipation of the Federal Reserve Open Market Committee meeting Wednesday and Thursday. Investors expect the Fed to raise rates for the ninth time since last year at the meeting; what they’re waiting for are signs of the Fed’s longer-term plans for rates. Wall Street is also waiting to see if second-quarter earnings live up to the strong first-quarter earnings.