Shares slip as surge in oil prices erases 157-point Dow rally
Written on February 21, 2008
new york — Stocks fell on Tuesday after oil’s surge above $100 a barrel dragged down consumer and technology shares, erasing a 157-point rally in the Dow Jones industrial average led by energy producers.
AMR Corp., Macy’s Inc. and Apple Inc. declined as crude oil advanced on speculation OPEC will cut production. AT&T Inc. and Verizon Communications Inc. led telephone stocks to the lowest level since September 2006 on concern competition will cut profits. Exxon Mobil Corp. climbed to a one-month high.
The Dow fell for a third day, losing 10.99 points to 12,337.22. The Standard & Poor’s 500 index slipped 1.21 to 1,348.78. The Nasdaq composite index dropped 15.6 to 2,306.20.
AMR, owner of American Airlines, lost 33 cents to $14.92. Macy’s slipped 87 cents to $24.51. Apple lost $2.45 to $122.18. The company cut the price of its iPod Shuffle to $49 after sales slowed last quarter.
Crude oil for March delivery rose $4.51, or 4.7 percent, to settle at $100.01 a barrel in New York, a record close. Futures reached $100.10, the highest intraday price since trading began in 1983. Gasoline for March delivery climbed 4.4 percent to close at a record $2.6031 a gallon after an explosion shut Alon USA Energy Inc.’s Big Spring, Texas, refinery. Natural gas advanced to the highest in 15 months on forecasts that colder weather in the eastern half of the U.S. will spur demand.
AT&T dropped $1.99 to $35.89. Verizon, which co-owns Verizon Wireless with Vodafone Group Plc, fell $2.49 to $35.34. Sprint, the third-largest U.S. wireless carrier, lost 34 cents to $9.23 online payday loan.
Merrill Lynch & Co. lost $1.51 to $50.13. Bear Stearns Cos. retreated $2.77 to $80.02.
Exxon gained $1.64 to $87.01. Chevron Corp. added $1.23 to $84.83. Freeport-McMoRan Copper & Gold Inc. climbed $4.76 to $97.94. Newmont Mining Corp. rose $2.59 to $50.48.
Chevron and Bank of America Corp. joined the Dow average Tuesday. They replaced Altria Group Inc. and Honeywell International Inc. Bank of America slipped 3 cents to $42.67. Altria added 40 cents to $72.93. Honeywell increased 37 cents to $56.41.
Medco Health Solutions Inc. increased $2.41 to $51.39. The biggest U.S. manager of drug benefits boosted its earnings forecast and reported fourth-quarter profit that beat estimates. Express Scripts Inc., the third-largest U.S. manager of drug benefits, added $1.95 to $65.65.
Wal-Mart Stores Inc. advanced 22 cents to $49.66.
Mentor Graphics Corp. rose $1.49 to $9.23. The maker of software for engineers predicted profit for 2008 that exceeded the average analyst estimate in a Bloomberg survey. Citigroup Inc. advised buying the shares.
Alon USA lost 98 cents to $17.26. The refinery blast in Texas idled the company’s biggest source of fuel production.
Treasuries fell, pushing the 10-year note’s yield to the highest level in more than a month.
Filed in: finance.