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US stocks mostly lower amid financial jitters; crude oil's retreat met with skepticism

US stocks mostly lower amid financial jitters; crude oil's retreat met with skepticism

Wall Street traded mostly lower Monday on top of last week's hefty losses, with investors doubtful that a pullback in oil prices from record levels would last.
Jitters about the struggling financial sector _ not to mention pure exhaustion from Friday's swoon _ added to the stock market's weakness.
"It's hard for anyone to jump in whole hog after Friday," said Thomas J. Lee, equities analyst at JPMorgan. Soaring energy prices, as well as a huge jump in the unemployment rate, sent the Dow Jones industrial average plunging nearly 400 points on Friday.
"I think everyone's going to watch oil, and I think it's going to paralyze us for a while," Lee said.
Crude prices dipped by about $4 to $135 a barrel on the New York Mercantile Exchange Monday, but only after Friday's $11-a-barrel surge to a new record of $139.12. With U.S. gasoline topping $4 a gallon, consumers' ballooning energy bills could force them to keep paring back spending on other items.
The cost of energy, driven partly by the weakening dollar, has been raising worries about inflation. Dallas Federal Reserve President Richard Fisher and New York Fed President Timothy Geithner in speeches Monday cited rising costs and the declining dollar as big concerns, while European Central Bank President Jean-Claude Trichet reiterated that the ECB might hike rates at its July meeting to control inflation.
Also giving Wall Street pause was Lehman Brothers Holdings Inc.'s unexpectedly large quarterly loss of $2.8 billion _ the investment bank's first loss since it spun off from American Express Co. in 1994. The poor performance added to uncertainty about how long it will take the ailing financial sector to recover from the mortgage market's near collapse.
"The financials are a key factor in today's market. It almost seems we're stuck in this range, trying to figure out when the end of this whole financial crisis is over," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. With the economic outlook unclear, investors leaned toward buying the stocks of large companies; blue-chip stocks tend to be more stable when the economy is weak.
The Dow rose 29.47, or 0.24 percent, to 12,239.28 after Friday's rout, which was the worst tumble on Wall Street in 15 months. Earlier Monday, the blue chip index rose more than 100 points.
Broader stock indicators declined. The Standard & Poor's 500 index fell 5.12, or 0.38 percent, to 1,355.56, while the Nasdaq composite index fell 34.55, or 1.40 percent, to 2,440.01.
Choppiness in the markets was aggravated by low trading volumes. Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume amounted to a light 777.5 million shares.
Bond prices fell on better-than-expected housing data, as well as ongoing jitters about inflation. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.02 percent from 3.91 percent late Friday.
The Dow initially got a lift from robust data on pending home sales and McDonald's sales, but then shrugged them off due to overriding concerns about inflation and the banking industry.
The National Association of Realtors said pending sales of existing homes rose more than 6 percent in April to the highest level since October, while the world's largest hamburger chain said global sales at locations open at least a year rose 7.7 percent in May.
McDonald's, one of the 30 components of the Dow, rose $2.43, or 4.3 percent, to $59.38.
Alcoa was another strong stock among the Dow Jones industrials, after the aluminum producer got a positive mention by Barron's. Alcoa rose $1.63, or 4.2 percent, to $40.84.
Apple Inc. weighed on the technology-dominated Nasdaq, falling $5.15, or 2.8 percent, to $180.49.
And Lehman, which plans to raise $6 billion in new capital through a stock offering, saw its shares fall $3.48, or 10.8 percent, to $28.81. Other weak financial stocks were Washington Mutual Inc., which tumbled 80 cents, or 10.6 percent, to $6.73, and Wachovia Corp., which dropped $1.17, or 5.8 percent, to $18.96.
The dollar rose against most other major currencies, while gold prices rose.
The Russell 2000 index of smaller companies fell 8.55, or 1.15 percent, to 731.82.
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Updated : 2021-04-23 08:24 GMT+08:00