Source: NYTimes.com
Shares on Wall Street turned negative Tuesday afternoon after the Dow Jones industrial average soared more than 200 points in morning trading after a decline in oil prices.
The gains were erased by the afternoon after shares of energy companies fell sharply, as investors bet that falling oil prices could hurt refineries and oil giants like Exxon Mobil and Chevron. The Dow closed down 26.63 points, to 11,516.92, while the broader Standard & Poor’s 500-stock index dropped about 0.41 percent or 5.25 points to 1,277.58. The Nasdaq declined 18.28 points, or 0.77 percent, to 2,349.24
The drop in oil prices dragged down the entire commodities sector, and initially lifted the stock markets as investors hoped that cheaper energy could nudge up consumer spending.
Crude oil futures fell to just over $105 a barrel in early trading, a five-month low, on Tuesday morning before climbing back slightly. Some investors had been concerned that Hurricane Gustav would disrupt refinery activity and oil supply chains in the Gulf Coast, but the storm passed over much of the region’s energy infrastructure.
“The storm, thank God, was not as bad as initially thought,” said Tom Bentz, an energy analyst at BNP Paribas in New York, which led investors to sell off their bets that the price of oil would move higher. Oil declined $5.75 to settle at $109.71 a barrel.
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