The stock market slipped on crude oil again today, dropping stock indexes to new lows for the year as oil prices hit another new high and were forecast to move still higher.
The Dow Jones industrial average fell almost 124 points to 9,814.59, and the Nasdaq Stock Market composite index plunged 30 points to 1,752.49. The Standard & Poor's 500 stock index dropped almost 13 points to 1,063.23.
Hitting a new record for the ninth time in the past 10 days, crude oil futures on the New York Mercantile Exchange jumped 70 cents a barrel to $45.50.
Record crude oil prices were blamed for the puny rebound in July retail sales reported today by the Commerce Department. Sales grew only 0.7 percent, even though auto sales increased as car makers boosted their incentives.
Retailers say family budgets are being pinched by rising energy prices. With crude continuing to rise, the fall heating season looming and back-to-school shopping underway, Wall Street worries that contracting consumer spending will undercut economic growth.
Oil traders blamed the unstoppable increase in crude prices on the confluence of a constellation of events that create instability in the oil market. Exports from Iraq have been disrupted by the war. Exports from Russia are threatened by the feud between the government and Yukos Oil, the biggest producer. Exports from Venezuela could be affected by a referendum Sunday that could unseat President Hugo Chavez. Hurricanes are disrupting production in the Gulf of Mexico and tanker shipments.
Although the weather in the gulf is expected to improve as Hurricane Charley and Tropical Storm Bonnie dissipate, forecasts are not so optimistic for the other pressures on prices. As a result, energy experts are predicting crude oil prices will continue to climb, the only debate is about how high.
That means the only question for stock market is: How Low?