Surging oil fuels worst week for stocks in 3 months
NEW YORK -- Stocks ended a week of big losses with more selling Friday as rising oil prices again raised worries that strained consumers will cut back spending and hurt the overall economy. The Dow Jones industrials fell nearly 150 points in the final session before the three-day holiday weekend.
Investors are uneasy about consumers, who at the start of Memorial Day weekend are paying gasoline prices that have gone up nearly 20%, or 65 cents a gallon, in the past year.
Wall Street fears that consumers, who account for more than two-thirds of U.S. economic activity, will pare spending to make room in their budgets for gas that has topped $4 a gallon in some parts of the country.
Light, sweet crude rose $1.38 to settle at $132.19 per barrel on the New York Mercantile Exchange. Oil saw its third weekly gain after surging to a record $135.09 a barrel on Thursday. Some investors are buying on the belief that global demand from countries like China and India will outstrip supply. A weak dollar also makes each barrel more expensive.
"Crude oil is still weighing on the market and particularly because this is a traditional driving holiday," said Chris Orndorff, director of equity strategy at Payden & Rygel in Los Angeles.
Some traders took Friday off before the long weekend; lighter volume can contribute to volatility in stocks.
The Dow fell 145.99, or 1.16%, to 12,479.63, for its worst week since early February.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 18.42, or 1.32%, to 1,375.93, and the Nasdaq composite index fell 19.91, or 0.81%, to 2,444.67.
For the week, the Dow is down 3.91%, the S&P 500 gave up 3.47% and the Nasdaq lost 3.33%.
The economic fallout from higher energy prices commanded Wall Street's focus this week. Stocks managed to post gains Thursday following the Dow's biggest two-day loss since late February. Despite the declines in the major indexes this week, stocks are off their mid-March lows. The Dow is still up 6.3% from its close of 11,740.15 on March 10.
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