Posted on: Wednesday, February 23, 2005
Dow sinks 174 points as crude-oil prices swell
By Michael J. Martinez
Associated Press
NEW YORK — A nearly 6 percent spike in crude oil prices sent stocks plunging yesterday as investors already concerned about inflation envisioned a repeat of last summer's selloff on Wall Street. The Dow Jones industrial average dropped 174 points, its biggest-point drop since mid-2003.
The surge in crude futures overshadowed strong earnings from Dow component Home Depot Inc. and intensifying merger talks between Federated Department Stores Inc. and May Department Stores Co.
In other developments yesterday, the Conference Board reported that consumer confidence fell slightly in February, to 104 from a revised 105.1 in January.
The weak dollar pushed bond prices slightly lower, with the yield on the 10-year Treasury note rising to 4.29 percent. Gold prices rose as investors hedged against the dollar's losses.
And after last week's jump in wholesale prices, many investors were bearish on January's Consumer Price Index, due out today.
Declining issues outnumbered advancers by about 3 to 1 on the Big Board, where consolidated volume amounted to 2.22 billion shares, compared with 1.96 billion on Friday.
Weakness in the dollar — which fell sharply against the yen and lost ground against other currencies — helped send crude futures soaring past $51 per barrel, much as they did during the third quarter last year, when the major stock indexes fell to multiyear lows.
