Oil futures keep stocks slightly lower
Volatile crude oil prices kept stocks under pressure Monday, leaving the major indexes with a slight loss. Questions over economic growth and the upcoming election weakened the U.S. dollar and contributed to investors’ uncertainty.
The dollar slid to an eight-month low early Monday as foreign investors worried that the tight presidential race and the still-rising price of oil could further hurt the U.S. economy. Overseas stock markets fell sharply, and Wall Street extended its slide from last week.
While oil prices, which topped $55 per barrel for the first time last week, managed to fall somewhat Monday, many analysts believe they’re still too high and will start to weigh heavily on the economy should they remain above $50. A barrel of light crude was quoted at $54.54, down 63 cents, on the New York Mercantile Exchange after rising as high as $55.67.
“For the first time, you’re really starting to see companies mention oil in their earnings reports this quarter,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati. “Up until now, high oil prices have been little more than a nuisance for investors. Now, it’s shaping up to be a real problem.”
Dow Jones industrial average fell 7.82, or 0.08 percent, to 9,749.99, setting a fresh year-to-date low for the Dow in its lowest close since Nov. 24.
Broader stock indicators finished narrowly lower. The Standard & Poor’s 500 index was down 0.94, or 0.09 percent, at 1,094.80, and the Nasdaq composite index lost 1.10, or 0.06 percent, at 1,914.04.
A strong report on home sales helped minimize the markets’ losses. The National Association of Realtors said home sales rose 3.1 percent in September to a seasonally adjusted annual rate of 6.75 million units, the third-highest showing ever, reversing two months of declines. The figure was better than the 6.54 million sales that economists had expected.
“The housing data came out and the market bumped up a little bit, but it didn’t have a real lasting kind of impact,” said Todd Leone, managing director of equity trading at SG Cowen Securities. “Today it’s all about oil, and when the futures go down, stocks go up.”
Advancing issues outnumbered decliners by nearly 5 to 4 on the New York Stock Exchange, where volume came to 1.38 billion shares.
The Russell 2000 index of smaller companies was up 3.89, or 0.69 percent, at 571.67.
Overseas, Japan’s Nikkei stock average fell 1.82 percent. In Europe, Britain’s FTSE 100 closed down 1.1 percent, France’s CAC-40 slid 2.05 percent for the session, and Germany’s DAX index tumbled 2.12 percent.