U.S. stocks tumble as high oil price weighs

By Agence France-Presse
Monday, February 27, 2012 16:14 EDT
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A stock trader watches the markets. Photo: AFP.
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NEW YORK — US stocks sank Monday as traders worried about the high price of oil and after the Group of 20 major economies snubbed Europe’s call for more aid to fight the eurozone debt crisis.

The Dow Jones Industrial Average was down 54.00 points (0.42 percent) to 12,928.95 in the first 45 minutes of trade (1515 GMT).

The tech-rich Nasdaq Composite dropped 15.65 (0.53 percent) to 2,948.10, while the broad-market S&P 500 fell 5.74 (0.42 percent) to 1,360.00.

Global oil prices slipped Monday amid profit taking after reaching nine-month highs last week on worries about the impact of heightened Iran tensions on tight global oil supplies.

A weekend G20 meeting of finance chiefs in Mexico ended with the European Union being told it needs to build up a bigger firewall before they would help by boosting the International Monetary Fund’s resources.

The US equity markets were in the red “following a rebuffed call by Europe for the G20 to boost the IMF’s eurozone crisis-fighting capability, while global economic concerns regarding the recent rally in oil prices are weighing on stocks,” Charles Schwab analysts said.

Traders weighed a fresh sign that the depressed US housing market may be starting to recover. Pending home sales rebounded 2.0 percent in January, the National Association of Realtors reported, twice as much as Wall Street expected.

Home-improvement retailer Lowe’s jumped 3.0 percent on better-than-expected quarterly results.

Motorola Solutions, the equipment maker created from a 2011 split of Motorola, fell 0.7 percent after announcing it bought back $1.2 billion of its shares from corporate raider Carl Icahn.

Billionaire investor Warren Buffett’s Berkshire Hathaway B shares dropped 1.6 percent. The octogenarian tycoon said a successor has been chosen to lead his holding company but he did not identify the person.

Carnival sank 1.9 percent. A cruise ship of troubled Italian unit Costa Crociere was adrift in the Indian Ocean following a generator fire.

Bond prices rallied. The yield on the 10-year Treasury fell to 1.93 percent from 1.98 percent on Friday, while the 30-year yield dropped to 3.06 percent from 3.10 percent.

Bond prices and yields move in opposite directions.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
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