US stocks lower
Inflation concerns dominated Wall Street today, with US stocks mostly lower as crude prices marched toward 68 dollars per barrel and jobless claims fell.
Interest in small-cap and technology stocks pushed the Nasdaq composite index narrowly higher, however, reaching its third five-year high in a row.
While the economy has so far absorbed high energy costs, fears remain that they could push prices up throughout the economy and spark inflation. A barrel of light crude was quoted at 67.94, up 87 cents, on the New York Mercantile Exchange.
Strength in the jobs market also unnerved investors, as the Labour Department reported a third straight drop in weekly unemployment claims. With the monthly jobs report due tomorrow, Wall Street worried that more people on the US’s payrolls would mean inreased demand, another potential catalyst for inflation.
Should the inflation threat increase, the Federal Reserve would continue raising interest rates to combat higher prices – a move that would make consumer loans and mortgages more expensive and corporate expansion efforts more costly.
“You still have a lot of uncertainty, and the jobs report tomorrow, which will set the stage for what the Fed could do,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. “You’re just not going to see a lot of buyers in the market ahead of that.”
The Dow Jones industrial average fell 23.05, or 0.21%, to 11,216.50.
Broader stock indicators also lost ground. The Standard & Poor’s 500 index lost 2.52, or 0.19%, to 1,309.04, and the Nasdaq composite index rose 1.42, or 0.06%, to 2,361.17. It was the Nasdaq’s best close since February 16, 2001.
