Thursday, 24 February 2011

Libya concerns see US stocks slide

US stocks fell for a third day as concerns continued over how violent clashes in Libya would affect the global oil market.
Major indexes pared steeper losses on Thursday afternoon after oil prices fell for the first time in nine days.
Oil fell to 97.28 dollars a barrel after the International Energy Agency said fighting between forces loyal to Muammar Gaddafi and anti-government protesters in Libya were not affecting oil inventories as much as analysts had feared. Libya is the world's 15th largest exporter of crude, accounting for 2% of global daily output. Oil had traded as high as 103.41 dollars earlier in the day.
Traders are worried that fighting could threaten Libya's oil production and spread to other countries in the region, such as oil-rich Saudi Arabia. Higher oil prices can also slow the US economy by increasing transportation costs.
Reports of ample oil inventories "calmed some of the short-term fears in the market," said Bruce McCain, chief investment strategist at Key Private Bank. "But the fact that there is very little real information coming out the country is worrying."
The Dow Jones industrial average fell 37.28 points, or 0.3%, to 12,068.50. It had been down as many as 122 points earlier in the day.
The Standard&Poor's 500 index fell 1.30, or 0.1%, to 1,306.10. The Nasdaq composite gained 14.91 points, or 0.5%, to 2,737.90.
The mixed stock performance came the same day the Labour Department reported that fewer people applied for unemployment benefits last week, a sign that the job market is recovering.
The four-week average for applications, a figure closely watched by financial analysts, fell to its lowest level in more than two and a half years.
The housing market, however, continued to lag. The Commerce Department said sales of new homes fell significantly in January.


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