Published March 22, 2011
FOX Business: The Power to Prosper
A combination of climbing crude prices and uncertainty regarding the economic impact of the situation in Libya sent stocks into negative territory.
As of 3:30 p.m. ET, the Dow Jones Industrial Average edged 11.4 points, or 0.09%, lower to 12025, the S&P 500 lost 3.5 points, or 0.27%, to 1294 and the Nasdaq Composite slid 7.5 points, or 0.28%, to 2684. The FOX 50 was lower by 2 points to 911.
A slew of corporate news, including AT&T's planned $39 billion acquisition of Deutsche Telekom's T-Mobile, sparked a broad rally on Monday that added to gains at the end of last week. However, geopolitical uncertainty and soaring oil prices put an end to the streak.
Concerns over Japan's nuclear crisis, which drove stocks sharply lower in the beginning of last week, were eased somewhat as the situation there appeared stable for another day. However, the country was hit with a fresh set of three strong earthquakes, registering around 6 in magnitude, which could potentially cause a setback in rebuilding efforts there.
The energy markets have been volatile in recent sessions, on fears tumult in North Africa and the Middle East could disrupt worldwide oil supplies.
Light, sweet crude jumped $1.88, or 1.9%, to $104.97 after jumping 1.3% on Monday.
Missile and air strikes against Libyan leader Muammar al-Qaddafi 's air defenses continued for a third night in the oil-producing country, as coalition forces upheld a U.N. resolution to protect civilians from violence. An American F-15E Eagle crash landed in rebel territory in Libya, but the crew of the fighter jet appear to be safe.
Gains in energy futures are having a tangible effect on prices consumers pay at the pump. A gallon of regular gas cost $3.55 on average nationwide, far higher than the $2.82 it cost last year.
On the economic front, Federal Reserve Bank of Dallas President Richard Fisher said the Fed should be able to cease its enormous asset-buying program, referred to as QE2, by June. The Fed embarked on a highly expansionary monetary policy regime that included QE2 and keeping short-term interest rates close to 0% in a bid to accelerate economic growth and shore up embattled financial markets.
In currencies, the euro recently edged lower by 0.04% against the U.S. dollar and the greenback slid 0.07% against a basket of world currencies.
Gold was lower by $1.20, or 0.01%, to $1427.
Netflix (NFLX) was upgraded to "outperform" from "neutral" by Credit Suisse, boosting shares.
Berkshire Hathaway chief Warren Buffet said he is interested in investing in large, international markets, such as India.
BJ'S Wholesale Club (BJ) shares soared after a regulatory filing revealed buyout firm Leonard Green & Partners is considering acquiring the wholesale chain, and presently owns 9.3% of BJ's voting stock.
Walgreen (WAG) unveiled second-quarter profits of 80 cents a share, a quarter-over-quarter gain of 17.6%, inline with analysts' estimates.
Crisis in Japan Impact
Disney (DIS) plans on resuming operations at some of its Japanese theme parks that had been closed since the devastating earthquake and tsunami.
Delta Air Lines (DAL) is cutting its capacity to Japan 15% to 20%.
Toyota (TM) and Honda (HMC) said they were extending production shutdowns at their Japanese factories until March 26 and March 27, respectively. Nissan resumed operation at some of its Japanese plants Monday.
European shares were mostly after inflation in the U.K. jumped at its fastest pace in two years. The English FTSE 100 was down 0.4% to 5762, the French CAC 40 edged lower by 0.3% to 3892 and the German DAX slipped 0.52% to 6780.
Asian markets gained as the situation in Japan stabilized: the Japanese Nikkei 225 surged 4.4% to 9608 after being closed for a holiday on Monday and the Chinese Hang Seng jumped 0.76% to 22857.