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Stock futures were a little higher early Thursday morning as stocks seemed poised for a rebound after plunging the last two straight sessions and as oil crossed $135 per barrel.On Wednesday, U.S. stocks dropped sharply, again, as oil continued to rally, breaking new highs throughout the day and as the FOMC minutes indicated the Federal Reserve expects higher inflation and slower economic growth. The Dow industrials finished the day down 227 points, or 1.77%, the same as the Nasdaq Composite which lost 43 points, and the S&P 500 declined 22 points, or 1.61%.
Not much economic news today except for weekly jobless claims, but no doubt investors will continue to focus on the surging price of oil, now blamed also on Wall Street as traders are scrambling to cover bets. Oil prices rose above $135 to $135.09 a barrel for the first time Thursday, as supply concerns continued increased with reports that the International Energy Agency would cut its supply predictions. Even with assumption that global demand possibly weakening, the weakening U.S dollar drove crude futures up. Still, some blame the oil's rally due to traders covering wrong-way bets that prices would decline and buying crude, according to data from the New York Mercantile Exchange.
Executives of the five big oil companies, Exxon Mobil Corp (NYSE: XOM), Chevron Corp (NYSE: CVX), ConocoPhillips (NYSE: COP) and the U.S. subsidiaries of BP Plc (NYSE: BP) and Royal Dutch Shell (NYSE: RDS) will appear before congress for the second day as gas prices hit yet another high. No doubt, with crude above $135 a barrel, their excuse of market forces rather than profiteering will sound that much better.
Also in the headlines this morning is the power sector with NRG Energy (NYSE: NRG) offering Wednesday to buy rival Calpine (NYSE: CPN) for about $11.3 billion in stock.
American International Group (NYSE: AIG) can sigh in relief as Standard & Poor's, which ended its review of the company's debt due to its plan to raise capital is no longer considering downgrading it.
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Reader Comments (Page 1 of 1)
5-22-2008 @ 8:13AM
Michael Schneider said...
The IEA adjustment today in their estimates of supplies that can be brought on over the next several years should quell some of the political ballyhoo over high prices temporarily-- and maybe move oil higher as well. It's hard to make a good case for profiteering when oil supplies are in decline. Also, farm subsidies continue unabated despite huge profits being made in agriculture now-- Congress runs a risk of losing some of its credibility with the public if they keep giving huge unnecessary subsidies to big agriculture while pointing bony fingers at the oil companies.