Stocks lose steam as oil sputters
Wall Street gives up all of the day's advance as crude prices settle at record $100.01. Energy stocks rise, while telecoms tumble.
February 19 2008: 3:27 PM EST
NEW YORK (CNNMoney.com) -- Blue chips were little changed, while the Nasdaq declined Tuesday afternoon as oil prices settled at a record $100.01 a barrel, boosting energy stocks, but also ramping up fears about a consumer-spending recession.
Weakness in telecom stocks and the latest problems for the bank sector also played a role in the afternoon turnaround.
The Dow Jones industrial average (
INDU) and the broader Standard & Poor's 500 (
SPX) index both lost a few points with just under an hour left in the session. The Nasdaq composite (
COMP) lost 0.7%.
All three major gauges had posted big gains through the mid-afternoon, but gave up most of that advance as crude oil prices gained momentum amid ongoing worries about potential OPEC production cuts coupled with the fallout from a Texas refinery fire.
The advance didn't seem to be based on anything new and was therefore probably not sustainable, said Joseph Saluzzi, co-head of equity trading at Themis Trading.
"You can get these quick rallies here and there, even for a day or a week, but there's still a downtrend," he said.
Regarding the rise in oil prices Tuesday, he said that while it boosts the energy stocks, it clearly weighs on investor sentiment as well. Additionally, gold prices surged nearly $24 Tuesday, reflecting inflation fears.
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http://money.cnn.com/2008/02/19/markets/markets_afternoon/index.htm