Surging oil continues to weigh on Wall Street

09:24, March 08, 2011      

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U.S. stocks ended lower on Monday as surging oil prices continued to weigh heavily on Wall Street.

About three stocks rose for every one that fell on the New York stock exchange, while on Nasdaq seven stocks rose for every two that fell.

The blue-chip Dow Jones industrial average dropped 79.85 points, or 0.66 percent, to 12,090.03, with Alcoa, the world's leading aluminum producer, falling 1.96 percent to lead the decliners.

The broader Standard & Poor's 500 Index was down 11.02 points, or 0.83 percent, to 1,310.13.

The tech-heavy Nasdaq underperformed the other two major indexes, losing 39.04 points, or 1.40 percent, to 2,745.63 after Wells Fargo downgraded the semiconductor sector on Monday, noting it has more than doubled over the past two years. The technology shares then fell below its crucial technical level, which raised concerns among investors.

Oil was still the main concerns in the stock market. Oil prices jumped over 106 dollars a barrel on Monday as the unrest in Libya intensified, spurring worries that the crisis in the Middle East region could further spread to those oil-rich countries like Iran and Saudi Arabia. On the other hand, investors were also worried that soaring oil prices could increase corporate costs, hurt consumer spending, and put world recovery in jeopardy.

As the result, U.S. stocks have been mostly moving in opposite directions against oil in recent weeks.

Also weighing on the market, Moody's Investors Service slashed Greece's credit rating by three notches into junk-grade territory at B1 earlier Monday, warning the debt-laden euro zone member has a 20 percent probability of default over five years.

Two large deals actually gave the market a lift at the open, but they were quickly overshadowed by the spike in oil prices and poor performance in the technology sector.

Western Digital Corp jumped 15.6 percent after the world's leading hard drive maker agreed to buy Hitachi Ltd's hard disk drive operations for about 4.3 billion dollars in cash and stock.

Meanwhile, French fashion conglomerate LVMH said it will purchase Italian jeweler Bulgari for 6 billion dollars.

Source: Xinhua
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