Stocks Fall as Oil Tops $100 a Barrel For 1st Time Since JulyNEW YORK (AP) — Stocks fell broadly in midday trading Wednesday as the price of oil topped $100 a barrel for the first time since July.
By: David K. Randall, Associated Press
NEW YORK (AP) — Stocks fell broadly in midday trading Wednesday as the price of oil topped $100 a barrel for the first time since July.
The jump in the price of crude could weaken the already U.S. fragile economy by raising costs for gas, heating oil and airline fuel. Oil futures jumped 2.7 percent to $102 a barrel as U.S. supplies dropped and a deal for a new pipeline threatened to cut them even more.
The Dow Jones industrial average fell nearly 125 points shortly after the opening bell but trimmed about half of those losses by midday. All 10 industry groups in the S&P 500 index fell.
The Dow was down 68 points, or 0.6 percent, to 12,026 at noon Eastern. Aluminum maker Alcoa Inc. fell the most of the 30 stocks in the Dow, 2 percent.
The S&P 500 fell 7, or 0.6 percent, to 1,251. The Nasdaq composite lost 15, or 0.6 percent, to 2,671.
U.S. economic reports were mixed. Output at the nation's factories, utilities and mines rose at the fastest pace in three months in October, the Federal Reserve said. Production of autos and parts surged 3.1 percent.
Consumer prices largely held steady last month. The Consumer Price Index dropped 0.1 percent in October, led by a steep decline in gas prices. An index of builder sentiment rose to the highest level since May 2010, but is still well below a level consistent with a strong housing market.
Concerns lingered about Europe's debt crisis as well. Greece's new prime minister, Lucas Papademos, faces a confidence vote later Wednesday. His government must pass unpopular austerity measures to receive the next round of emergency loans.
The vote comes one day after reports that the European Union economy grew by just 0.2 percent between July and September, a sign that Europe may be headed for a recession. Together, the countries in the European Union are the world's largest economy and a key source of revenue for companies in the Standard and Poor's 500 index.
Borrowing rates remained dangerously high for Italy and other large European countries like Spain and France, the latest signal that Europe's debt woes could be spreading from smaller countries like Greece and Portugal and into the industrial core of the region.
The yield on Italy's benchmark 10-year government bond was 6.99 percent, a level widely seen as unsustainable. Comparable rates for Spain and France were 6.37 percent and 3.69 percent. That's far above the 1.81 percent rate that Germany, Europe's strongest economy, has to pay to borrow money on debt markets.
In corporate news, Target Corp. gained 0.1 percent after sales growth and an improvement in its credit card business helped the retailer beat Wall Street's profit estimates. Abercrombie & Fitch Co. plunged 14 percent after the company reported earnings that fell far short of Wall Street's expectations. The company said rising costs for cotton and other commodities cut into profits.
Dell Inc. dropped 2.5 percent after the company said late Tuesday that its revenues will be held back by an industry-wide shortage of hard drives.