Crude oil worries hit US stocks

Volatile crude oil prices kept stocks under pressure today, leaving the major US indexes with a slight loss.

Volatile crude oil prices kept stocks under pressure today, leaving the major US indexes with a slight loss.

Questions over economic growth and the upcoming election weakened the US dollar and contributed to investors’ uncertainty.

The dollar slid to an eight-month low early today as foreign investors worried that the tight presidential race and the still rising price of oil could further hurt the US economy.

Overseas stock markets fell sharply, and Wall Street extended its slide from last week.

While oil prices, which topped 55 dollars per barrel for the first time last week, managed to fall somewhat today, many analysts believe they are still too high and will start to weigh heavily on the economy should they remain above 50 dollars.

A barrel of light crude was quoted at 54.54 dollars, 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.”

The Dow Jones industrial average fell 7.82, or 0.08%, to 9,749.99, setting a fresh year-to-date low for the Dow in its lowest close since November 24.

Broader stock indicators finished narrowly lower. The Standard & Poor’s 500 index was down 0.94, or 0.09%, at 1,094.80, and the Nasdaq composite index lost 1.10, or 0.06%, at 1,914.04.

A strong report on home sales helped minimise the markets’ losses.

The National Association of Realtors said home sales rose 3.1% 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.”

Despite oil futures falling, the uncertainty over the economy and the elections accentuated negative earnings reports, while overshadowing any good news.

Telecommunications company BellSouth saw its profits fall 14.6% in the third quarter on flat revenues, and the company missed Wall Street’s profit forecasts.

Advancing issues outnumbered decliners by nearly 5 to 4 on the New York Stock Exchange, where volume came to 1.38 billion shares, compared with 1.47 billion at the same point on Friday.

The Russell 2000 index of smaller companies was up 3.89, or 0.69%, at 571.67.

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