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US stocks tank on Libya unrest

US stocks tank on Libya unrest
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First Published: Tue, Mar 08 2011. 08 09 AM IST
Updated: Tue, Mar 08 2011. 08 09 AM IST
New York: US stocks sank for a second day on Monday as Libya veered toward civil war and unrest continued to roil some Arab countries, driving crude oil above $106 a barrel in New York.
“Oil continues to call the shots for the equity market and has left economics news secondary in investors’ minds,” said Scott Marcouiller at Wells Fargo Advisors.
The Dow Jones Industrial Average dropped 79.85 points 0.66% to finish at 12,090.03.
The S&P 500 index, a broader measure of the markets, fell 11.02 points 0.83% to 1,310.13, while the tech-rich Nasdaq Composite shed 39.04 points 1.40% at 2,745.63.
Still, the main indexes pared earlier losses amid concern that the Libyan unrest would spread to other oil-producing countries in the Middle East and North Africa.
“We expect global stock prices will remain volatile following daily moves in crude oil futures prices. The situation in the Middle East remains very volatile. Thus, we expect further upward pressure in crude oil prices in coming days,” said Frederic Dickson at DA Davidson & Co.
“Until this situation unwinds, we expect US stock prices to remain range-bound with sell-offs and rallies remaining short and news-driven.”
The stock market, under pressure from the political uncertainty, marked its second anniversary of near-steady rebound from a 6 March, 2009 nadir.
New York’s main futures contract, light sweet crude for delivery in April, topped $106 a barrel before settling above $105. The WTI contract has gained more than 20% over the past two weeks.
Tech stocks had a rough ride after Wells Fargo analysts published negative comment on the computer chip sector.
On the blue-chip Dow, Intel fell 1.62% to $21.21. Rival AMD tumbled 4.17% to $8.84 on the Nasdaq.
Only four of the Dow’s 30 stocks finished in positive territory. The biggest component, ExxonMobil, slipped 0.42% to $84.72.
Shares of hard-disk-drive maker Western Digital soared 15.56% to $4.67 after it said it was buying the disc-drive unit of Japan’s Hitachi Ltd., Hitachi Global Storage Technologies, for about $4.3 billion in stock and cash.
On Friday, soaring oil prices had outweighed positive US February jobs data showing the unemployment rate fell to 8.9% from 9.0% in January.
In world news, credit-rating agency Moody’s downgraded Greece’s debt to B1, down 3 notches, as a result of its large debt burden and implementation risks to its structural reform package.
In corporate news, Google’s android is now the most-used smart phone operating system in the US, beating the Blackberry. Google’s Android was released about 2 years ago. Android is now the most-used smartphone operating system in the United States - a stunning race to the top from a platform that didn’t exist just 27 months ago.
In corporate news, Startbucks ended the day higher one and a half % , after morgan Stanley upgraded its price target and after the company announced that it is planning several acquisions that should help its consumer products division. Starbucks celebrates its 40th anniversary this week.
The bond market slipped. The yield on the 10-ear Treasury rose to 3.497% from 3.492% late Friday, while that on the 30-year bond increased to 4.608% from 4.601%.
Bond prices and yields move in opposite directions.
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First Published: Tue, Mar 08 2011. 08 09 AM IST
More Topics: Markets | US | Stocks | DowJones | Nasdaq |