Posted on: Friday, June 24, 2005
Stocks hit slippery slide as oil nears $60 plateau
By Michael J. Martinez
Associated Press
NEW YORK — Stocks plunged yesterday, sending the Dow Jones industrials down 166 points as oil prices briefly moved past the psychologically important $60 per barrel level for the first time. Oil's advance accelerated a selloff prompted by poor earnings from FedEx Corp. — which blamed high fuel prices for its disappointing profits.
A barrel of light crude settled at $59.42, up $1.33, on the New York Mercantile Exchange after peaking at $60.05, an intraday record.
"We always wondered what $60 a barrel oil would cost us, and now we know," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.
The Dow fell 166.49, or 1.57 percent, to 10,421.44.
Profits at FedEx rose 9 percent in the latest quarter, but rising jet fuel costs and the expense of adding a new round-the-world flight route led the shipping company to miss Wall Street's profit expectations by 2 cents per share. FedEx tumbled $7.35 to $80.77.
Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where preliminary consolidated volume came to 2.02 billion shares, compared with 1.81 billion traded on Wednesday.
FedEx's earnings missed Wall Street's expectations and raised new concerns about oil's impact on corporate profits. That led crude oil futures to creep higher through the day, breaking through the $60-per-barrel barrier. While purely psychological, that move was enough to send stocks tumbling.
