Stocks Are Lower on Surging Oil Prices Monday June 20, 10:19 am ET By Michael J. Martinez, AP Business Writer Stocks Are Lower As the Possibility of $60-Per-Barrel Oil Prices Unsettles Investors
NEW YORK (AP) -- Stocks opened lower Monday as the possibility of $60-per-barrel oil prices unsettled investors concerned about the impact that would have on the economy. Building on last week's gains, crude oil futures were near $59 per barrel in early trading, and Wall Street worried that higher prices at the pump would reduce consumer spending and slow economic growth faster than expected. A barrel of light crude was quoted at $58.70, up 23 cents, on the New York Mercantile Exchange.
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The concern over oil, combined with a relative dearth of economic data and earnings reports in the week ahead, threatened to derail last week's stock rally, which saw the major indexes climb for five straight sessions.
In midmorning trading, the Dow Jones industrial average fell 46.03, or 0.4 percent, to 10,577.04.
Broader stock indicators also moved lower. The Standard & Poor's 500 index was down 4.97, or 0.4 percent, at 1,211.99, and the Nasdaq composite index dropped 9.55, or 0.5 percent, to 2,080.56.
The bond market sold off alongside stocks, with the yield on the 10-year Treasury note rising to 4.13 percent from 4.08 percent late Friday. The dollar made gains against most major currencies, and gold prices also rose.
The Conference Board's latest reading of the index of leading economic indicators showed that the economy could already be slowing faster than many investors expect. The index for May dropped 0.5 percent, more than the 0.3 percent drop Wall Street had expected and surpassing the 0.2 percent dip the previous month.
Cablevision Systems Corp. could be the latest major company taken private. The Dolan family, which already exercises control over the company, has presented a $7.9 billion, $33.50 per share offer to take the cable operator private and spin off its entertainment holdings, including New York's Madison Square Garden, into a different public company. Cablevision surged 24.8 percent, or $6.66, to $33.53 on the news.
According to reports from The Wall Street Journal and The New York Times, online broker Ameritrade Holding Corp. is close to acquiring rival TD Waterhouse from its parent, Toronto Dominion Bank. The Canadian company could take a stake in the combined online firm, the papers said. However, reports added that E-Trade Financial Corp. is still in merger talks with Ameritrade as well. Ameritrade dropped 22 cents to $14.79, while Toronto-Dominion climbed 17 cents to $43.23 and E-Trade slipped 14 cents to $12.99.
Google Inc. fell $7.40 to $272.90 after media reports said the company plans to start an online payment system to rival eBay Inc.'s widely used PayPal service. eBay lost $1.33 to $36.72 as investors worried about the prospects of strong competition in an area currently dominated by PayPal.
Embattled automakers Ford Motor Co. and rival General Motors Corp. saw their shares upgraded by Banc of America Securities. Analysts there said the possibility of healthcare concessions from the United Auto Workers would help the companies as they struggle to regain financial footing. Ford nonetheless slipped 7 cents to $11.21, while Dow component GM was up 7 cents at $35.75.
Declining issues outnumbered advancers by nearly 9 to 4 on the New York Stock Exchange, where volume came to 144.89 million shares, compared with 554.92 million traded at the same point on Friday. Friday's heavy trading was due to the expiration of options and futures contracts.
The Russell 2000 index of smaller companies was down 1.57, or 0.2 percent, at 642.62.
Overseas, Japan's Nikkei stock average fell 0.27 percent. In afternoon trading, Britain's FTSE 100 was down 0.16 percent, Germany's DAX index lost 0.59 percent, and France's CAC-40 dropped 0.66 percent.
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