Oil Drops, Stocks Rise, Economy Grows
NEW YORK - Stocks rose for the third straight session yesterday as oil prices fell sharply and the government reported that the economy grew last quarter at a faster pace than previously estimated.
A rising dollar helped push crude oil prices down by more than $4 per barrel, the biggest single-session drop since March.
Investors have been concerned recently that rising oil and gasoline prices would curb consumer spending, which accounts for more than two-thirds of U.S. economic activity.
The revised reading of first-quarter gross domestic product helped ease some worries about recession, which is defined by two straight quarters of decreasing GDP. The Commerce Department said the economy grew at an annual rate of 0.9 percent - above the department’s earlier estimate of 0.6 percent and the fourth-quarter increase of 0.6 percent.
Meanwhile, MasterCard Inc. said consumers are continuing to reach into their wallets for plastic. The company’s shares jumped to a fresh high after the credit card processor said it still expects to see double-digit growth in net revenue this year. While it said gross dollar growth in the U.S. is slowing, purchasing is increasing in other parts of the world. Avoiding a big falloff in consumer spending coupled with strength elsewhere in the world could help the U.S. economy avoid a serious downturn, some economists have reasoned.
The Dow Jones Industrial Average rose 52.19, or 0.41 percent, to 12,646.22. The Dow was up nearly 133 points at its high of the session.
The dollar rose against other major currencies, while gold prices fell.
Light, sweet crude fell $4.41 to settle at $126.62 on the New York Mercantile Exchange. It was the lowest close in two weeks.
In corporate news, MasterCard rose $22.11, or 7.7 percent, to $309 after releasing its forecast.
(AP)
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“A rising dollar helped push crude oil prices down by more than $4 per barrel…”
Nah… it was drill’s Amy Winehouse/dead flies imagery that did it.
May 29th, 2008 at 7:44 pmAt some point that I am not qualified to pinpoint, decreased consumption and increased stockpiles will lead to a drop sufficient to trigger “panic selling” by the speculators and even legitimate investors and there will be a precipitous drop. It’ll be the “Tulip Panic” all over again, but not with tulips and not in Holland but with plenty of panic-i-ness.
May 29th, 2008 at 9:30 pmyeah crude goes down about 4 bucks yet gas in my town just went up 18 more cents 2 days ago
May 30th, 2008 at 5:22 am