NEW YORK (Reuters) - U.S. stocks finished sharply lower on Thursday as a jump in oil prices above $48 a barrel stirred concern about higher energy costs and General Motors Corp provided a weaker profit outlook. Oil prices surged to a six-week high yesterday, boosted by predictions of a cold blast in the northeast and a dip in stockpiles from last week.
For the blue-chip Dow average, it was the largest one-day percentage decline since Nov. 19. For the tech-laced Nasdaq and the broader Standard & Poor's 500 index, it was the largest one-day percentage drop since Jan 4. <>Crude shot up $2.03 at one point to $48.40 a barrel, its highest level since Dec. 1, before easing to close at $48.04. "A cold winter froze the market's faith today," said Alaron oil analyst Phil Flynn.
The weather warnings for next week came at the worst possible time, Flynn said, against the backdrop of OPEC production cuts, supply disruptions in the North Sea, and the tense buildup to the Jan. 30 Iraqi elections. That's all combined to push crude up 14% so far this month.
"The terror premium has increased again," he said.
<> On Wall Street, rising oil sent stocks tumbling despite solid December retail sales. The Dow plunged 111.95 to 10,505.83, while the Nasdaq fell 21.97 to 2,070.56. It was the lowest close for the blue-chip index since Dec. 8, and the lowest for the Nasdaq since Nov. 19.Worries over coming corporate profit announcements and a bump in jobless claims by 10,000 to 357,000 last week also pressured stocks, analysts said.
WASHINGTON (Reuters) - A sharp plunge in energy prices pulled U.S. producer prices down 0.7 percent last month, a sharper-than-expected drop and the biggest in more than 1-1/2 years, a government report showed on Friday.
Prices received by producers were also well contained when excluding volatile food and energy costs, advancing a mild 0.1 percent, the Labor Department said.
Prices for U.S. Treasury bonds moved higher and stock futures jumped as the report eased concerns that rising production costs could spill over into higher consumer prices and lead to a quickened pace of interest-rate hikes by the Federal Reserve. The dollar was little changed.
Wall Street economists had forecast just a 0.1 percent decline in the producer price index, which measures prices received by farms, factories and refineries, and had expected the so-called core rate to rise 0.2 percent.
Economists said the report shed little light on the U.S. inflation outlook since it was heavily skewed by the energy price drop. "It was all energy prices,"got it? while energy prices were down things were getting better, when energy prices rise things go from bad to worse... the fact that the upswing positives came out of official government reports ought to put everyone on notice that these guys are lying to us over the long haul. The "official" optimism reflects actual data that represents a tiny improvement following a huge downturn.. now we know that a bigger downturn has taken every possible aspect of that same tiny up and smashed it on the same rocks as the WMD claims made to move us into Iraq... as jon Stewart said on the Daily Show--$*@# us...
