NEW YORK - Wall Street fell moderately Monday in an erratic session dominated by worries about inflation, somewhat soothed by a steep drop in the price of oil.
That decline eased some of investors’ worries about inflation.
Wall Street initially sold off after the Commerce Department said an inflation gauge tied to consumer spending rose by a sharp 0.8 per cent in June, reflecting higher gasoline prices — the biggest jump in the indicator since a one per cent rise in February 1981.
The report fed investors’ growing concerns about the impact of rising prices on consumers, whose spending is the lifeblood of the economy.
The Dow Jones industrial average fell 42.17, or 0.37 per cent, to 11,284.15. The Dow had been down more than 100 points in early trading.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 11.30, or 0.9 per cent, to 1,249.01, and the Nasdaq
composite index declined 25.40, or 1.1 per cent, to 2,285.56.
LONDON - Europe’s main stock markets closed lower on Monday, with fears about the impact of an economic slowdown and a fall in profits at global banking giant HSBC weighing on sentiment, dealers said.
The FTSE 100 index shed 34.5 points, or 0.64 per cent, to end at 5,320.20.
FRANKFURT - The Dax fell 46.65 points, or 0.73 per cent, to finish at 6,349.81.
PARIS - The CAC 40 lost 33.71 points, or 0.78 per cent, to close at 4,280.63.
TOKYO - Japanese share prices closed down 1.23 per cent on Monday, ending below the key 13,000 points level as investors worried about weak company earnings and losses on Wall Street.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index slid 161.41 points to 12,933.18, the lowest close since July 18.
HONG KONG - Hong Kong share prices closed down 1.5 per cent Monday as concern about oil prices once again spooked investors, while banking titan HSBC posted a 29-per cent profit tumble.
The Hang Seng index shed 347.68 points to 22,514.92 after a jump in US unemployment and a fall on Wall Street also soured sentiment.
WELLINGTON - The New Zealand sharemarket was one of the few markets to post gains.
The benchmark NZSX-50 index was up 16.06 points at 3319.22, after losing 33 points on Friday.
SYDNEY - The Australian stock market is expected to decline after US equities fell on worries about accelerating inflation.
Resource stocks may slip after commodities including oil and gold declined overnight.
At 0735 AEST on the Sydney Futures exchange, the September share price index futures contract was 44 points lower at 4,817.
In economic news today, the Reserve Bank of Australia announces its decision on interest rates following its monthly board meeting.
The Australian Industry Group/Commonwealth Bank Australian Performance of Services Index for July is due.
In company news, Seven Network Ltd releases its annual results and AXA Asia Pacific Holdings Ltd releases interim results.
Telstra Corp Ltd group managing director of public policy and communications Dr Phil Burgess speaks at an American Chamber of Commerce in Australia lunch.
Campbell Brothers Ltd holds its annual general meeting.
Yesterday, the Australian share market closed weaker today on lower base metal prices and a profit downgrade by Lend Lease Corporation.
While resources and property stocks came under pressure, infrastructure firm Asciano Group soared following a $2.9 billion unsolicited takeover offer by a private equity player and an independent investment fund.
The benchmark S&P/ASX200 index fell 16.3 points, or 0.33 per cent, to 4887.7, while the broader All Ordinaries index lost 20.4 points, or 0.41 per cent, to 4957.6.
NYMEX
Oil prices plunged to a three-month low on Monday, briefly tumbling below $US120 a barrel in another huge sell-off after Tropical Storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico.
Crude’s steep drop - prices fell more than $US5 at one point during the day - dragged down other commodities from corn to copper and mimicked the big nosedives of the past three weeks, adding to growing beliefs that the oil bubble is at least temporarily deflating.
A gallon of regular gasolene fell on average about half a cent overnight to $US3.881 ($US1.02 a litre).
Also weighing on oil prices Monday was a report by the Commerce Department that consumer spending after adjusting for inflation fell in June as shoppers dealt with higher prices for gasoline, food and other items. That fed investors’ expectations that a US economic slowdown is sharply curbing US demand for fossil fuels.
Light, sweet crude for September delivery fell $US3.69, or 2.9 per cent, to settle at $US121.41 a barrel on the New York Mercantile Exchange. It was crude’s lowest settlement price since May 5.
Earlier, prices plummeted to $US119.50, the lowest level since May 6.
Crude has now fallen in six of the last nine sessions and has shaved 18 per cent off its trading record of $US147.27 reached July 11.
In London, Brent crude for September delivery fell $US3.50 to settle at $US120.68 a barrel, after earlier falling to a contract-low of $US118.80.
Natural gas futures also fell sharply, dropping 66.3 cents, or 7.1 per cent, to settle at $US8.726 per 1,000 cubic feet.
Gasoline futures fell 8.41 cents, or 2.7 per cent, to settle at $US3.0002 a gallon.
In other Nymex trading, heating oil futures fell 8.67 cents to settle at $US3.3501 a gallon.
COMEX
Gold fell as a drop in energy costs reduced the appeal of the precious metal as a hedge against inflation. Silver declined, too.
Gold futures for December delivery fell $US9.60, or one per cent, to $US907.90 an ounce on the Comex division of the New York Mercantile Exchange. The metal fell 2.1 per cent last week, the third straight decline.
Silver futures for September delivery declined 38 cents, or 2.2 per cent, to $US17.14 an ounce. Silver has gained 15 per cent this year, while gold advanced 8.3 per cent.
Copper futures for September delivery tumbled 13.85 cents, or 3.9 per cent, to $US3.44 a pound on the Comex. Earlier, the price touched $US3.426, the lowest since Feb 8.
