Rising Oil Prices Pull Down Markets
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It was April all over again on Wall Street, where for the second time this year spiking oil prices sent the stock market spinning to serious losses. Falling every day this week, the Dow Jones industrial average plunged 325 points, to 10,297.84. The Nasdaq composite index dropped 38 points, to 2053.27. The Standard & Poor's 500-stock index fell 25 points, to 1191.57.
The Dow's retreat was its second-worst weekly loss of the year, second only to a 400-point April rout that also was triggered by soaring oil prices. It took the Dow two months to squirm its way out of that oil slick, only to slide back again last week.
While the "stocks go down when oil goes up" pattern is exaggerated by speculators who jump out of stocks and into oil when they see a stampede, Wall Street's real worry is that crude oil is clogging up the economy.
Recent economic data hint at a slowdown, but Wall Street is waiting for second-quarter corporate profit reports, which will begin to flow soon. If earnings are disappointing, the market is likely to suffer.
-- Jerry Knight
