Oil-Price Spike, Fed Rate Warnings Push Stocks Lower for the Week
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Saturday, February 10, 2007
NEW YORK, Feb. 9 -- Investors retreated Friday after a spike in oil prices and warnings from two Federal Reserve officials that interest rates could rise if inflation does not ebb.
Wall Street ended the week lower after moving in a narrow range.
The Dow Jones industrial average fell 56.80, to 12,580.83 on Friday. The Standard & Poor's 500-stock index fell 10.25, to 1438.06. The Nasdaq composite index fell 28.85, to 2459.82.
The market was in positive territory for much of the day before investors began to sell after St. Louis Fed President William Poole and Dallas Fed President Richard Fisher warned that interest rates would rise if inflation did not decline. Bond prices fell sharply after speeches by Poole and Fisher, with the yield on the 10-year Treasury note rising to 4.78 percent.
Investors also watched the movements of crude oil, which crossed $60 per barrel for the first time since early January, before settling at $59.89 a barrel, up 18 cents.
For the week, all three indexes were down less than 1 percent.
"The market has been trading without a lot of economic information to this point, but generally oil prices are providing somewhat of a headwind," said Lynn Reaser, chief economist with the investment strategies group at Bank of America. The market is looking for a catalyst, she said, and has fluctuated with the release of earnings and economic data.
Movers
Gateway fell 21 cents, to $1.94. The computer maker had a fourth-quarter profit with the help of a tax benefit and said it planned to cut $20 million to $25 million in expenses and lay off more workers.
Mettler-Toledo International rose $4.60, to $89.20. The maker of scientific tools reported a stronger-than-expected fourth-quarter profit and raised its forecast for 2007.
Broadcom rose 55 cents, to $34.22. The chipmaker's fourth-quarter profit fell sharply from charges related to how it previously accounted for stock options grants.
Shutterfly rose $1.61, to $15.35. The provider of online photography services reported better-than-expected fourth-quarter earnings and revenue.
