More doom and gloom fell over Wall Street today as the Dow Jones Industrial Average briefly fell below the psychological barrier of 12,000 points.
The closely-watched index has not traded below 12,000 since March 18, and last closed below it on March 17.
The Dow ended the day down 131 points, but managed to close at 12,029, just slightly above the nice round number.
The rising price of oil, and fears about its prolonged impact on the U.S. economy, helped drive stocks down.
The price of oil climbed $2.67 today, settling at $136.68 a barrel this afternoon at the New York Mercantile Exchange. Oil shot up today on reports that Nigerian oil workers might shortly strike. The U.S. government also said in a weekly report that gasoline inventories were lower than expected.
Oil prices are having a major impact on some very large U.S. corporations.
FedEx gave a bleak outlook for business as it today reported a loss for its fourth quarter. FedEx had a loss of $241 million, compared with a profit of $610 million for the same quarter last year. Rising fuel costs and a slowing economy were blamed.
There was also more bad news in the last day from the airline industry with Northwest and United announcing further flight cuts, the grounding of airplanes and layoffs, all tied to fuel prices.
Also pulling down the market today were some bad reports out of the financial section, with Morgan Stanley Fifth Third Bancorp and MF Global both adding to Wall Street's fears.
Morgan Stanley, for instance, reported a profit for its second quarter, but earnings at the country's second-largest U.S. investment bank were still down 61 percent from a year ago.
Those worried about rising oil prices got some good news this morning when President Bush urged Congress to end a ban on offshore oil drilling.
Drilling for oil in the Gulf of Mexico and in Alaska's Arctic National Wildlife Refuge have long been a battleground between Republicans and Democrats. The two sides differ over what the effect of such oil exploration would be on the environment.
"If congressional leaders leave for the Fourth of July recess without taking action, they will need to explain why $4-a-gallon gasoline is not enough incentive for them to act. And Americans will rightly ask how high oil -- how high gas prices have to rise before the Democratic-controlled Congress will do something about it," Bush said today in the Rose Garden.
Sen. Dick Durbin, D-Ill., the majority whip, responded on the Senate floor this afternoon, saying, "We have to look to the reality. The reality is oil companies are making profits at record-breaking levels. The reality is that speculation is driving the price of oil up. And the reality is that the president of the United States has yet to call the oil company executives into the Oval Office to tell them they're wrecking the economy."
Durbin said oil companies already have the rights to drill on 68 million acres of American soil that aren't currently under development.
With a gallon of regular gasoline now averaging $4.08 and an election only five months away, the issue of expanded drilling has returned to the forefront.
Arizona Sen. John McCain, the presumptive Republican presidential nominee, on Tuesday said he favored offshore drilling.
"As for offshore drilling, it's safe enough these days that not even hurricanes Katrina and Rita could cause significant spillage from the battered rigs off the coasts of New Orleans and Houston," McCain said.