Stocks Sink on Record Oil and Fear The Fed is Done Cutting Rates
Stocks were weaker today on record oil prices and a warning from the Federal Reserve that, even though the economic outlook is weak, they are likely done cutting interest rates.
July crude settled at $133.17 per barrel in New York, up 3.3% on the session after an inventory report showed that crude supply fell 5.32 million barrels versus an expected rise in supply of 300,000 barrels. Crude futures are up 17% this month alone.
This afternoon, the Fed minutes of the April 29-30 meeting showed that most members viewed the decision to reduce interest rates as a "close call." In regards to the statement to be released, the Fed Committee felt that it was no longer appropriate for the statement to emphasize the downside risks to growth. Several Fed members said it would not be appropriate to ease further even if data suggests the economy was slowing further or even contracting, unless they see a "significant" weakening of the economic outlook.
The Dow fell 227 points, or nearly 2% today. The Nasdaq fell 44 points and the S&P lost 23 points.
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