Wall Street's four-day winning streak ended today as the index of leading economic indicators slumped and crude oil prices soared past $48 a barrel in response to attacks on oil facilities in Iraq.
Crude futures jumped $1.43 a barrel to $48.70 after news that the Basra headquarters of Iraq's South Oil Co. had been attacked and set aflame by followers of radical cleric Moqtada Sadr. Later reports that Iraqi oil exports were continuing unabated helped calm the stock market, but by then oil trading had closed for the day.
New York Mercantile Exchange traders braced for Friday's final day of trading of futures contracts for crude to be delivered in September. That contract, which reflects the day-by-day fluctuations on oil prices, has gone up $7 a barrel this month, hitting record highs every day but one.
The Dow Jones industrial average closed down 42 points at 10040.82. The Standard & Poor's 500 stock index fell four points to 1091.23. The Nasdaq Stock Market composite index closed at 1819.89, down more than 11 points.
While stocks were depressed by the huge increase in oil prices and disappointing economic data, traders were ebullient about the debut of Google, whose star-crossed initial public offering turned out to be auspicious after all.
Facing opposition from Wall Street to its unusual auction process for the share and beset by its own bungling, Google's stock was sold for just $85 a share, far short of the $135 a share goal the company originally set.
But investors who couldn't get a piece of the IPO were lined up to bid and Google stock took off, jumping more than $15 a share, or 18 percent, to close at $100.33.
Ironically Google's auction process was designed to prevent an opening day jump in the price of the stock -- which benefits traders who sell the first day, but not the company itself. The so-called "open IPO" process allowed potential buyers to put in bids for the shares before trading began and used those bids to set the offering price. In theory, that was supposed to produce a stable price in early trading.
The wild trading in Google made millions for traders, improving the mood of a market that opened with depressing news about the economy.
This morning the Conference Board reported its index of leading economic indicators--intended to predict the course of the economy over the next three to six months -- fell again. It was down 0.3 percent following a 0.1 percent drop the previous month.
A slowing economy was also shown in the manufacturing index of the Federal Reserve bank of Philadelphia, which dropped from 36.1 to 28.5.