NEW YORK (AP) — Uneasy investors sold stocks lower yesterday as oil prices climbed above $51 per barrel, creating new worries that rising energy costs would curb consumer spending and corporate profits. Only the Nasdaq Composite Index managed a small gain.
The major indexes did not see a major oil-based sell-off, as they had in the past, as crude futures posted a record closing price. A barrel of light crude closed at $51.09, up $1.18, on the New York Mercantile Exchange, after reaching an intraday record high of $51.29. Nonetheless, rising energy prices made investors anxious enough that they decided to collect profits after the market’s substantial gains in four of the past five sessions.
“We’re now talking about higher energy prices through the winter months, and futures for December and January have moved up quite dramatically,” said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. “What that suggests is that maybe this is a longer break on the economy’s growth than we’ve been anticipating.”
The Dow Jones Industrial Average fell 38.86, or 0.4 percent, to 10,177.68.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index was down 0.69, or 0.1 percent, at 1,134.48, and the Nasdaq gained 3.10, or 0.2 percent, to 1,955.50.
As oil prices climbed, investors were concerned that the economic “soft patch” that plagued Wall Street this past summer might continue through the fourth quarter and that the market’s usual year-end rally might be muted, especially if oil prices remain in the $50 per barrel range.
“I think there’s some money that really wants to come into the market, but there’s some hesitancy out there because of these uncertainties,” said Michael Murphy, head trader at Wachovia Securities in Baltimore. “Third-quarter numbers will be coming out here starting this week, and we have the jobs figures on Friday, and that will move things along one way or the other.”
Adding to investors’ concerns was a disappointing report from the Institute for Supply Management, which said its service sector index fell to 56.7 in September from 58.2 in August. A figure over 50 represents expansion in the service sector, but the latest number represented a slowdown in growth.
Technology stocks fell as Advanced Micro Devices Inc., Intel Corp.’s rival in computer semiconductors, warned that its revenues would be less than forecast for the third quarter. AMD slid 2 cents to $13.68, while Intel gained 19 cents to $21.32.
A pair of technology bellwethers and Dow components were affected by a J.P. Morgan Securities research note, which upgraded IBM Corp. to “overweight” from “neutral,” while downgrading Hewlett-Packard Co. to “neutral” from “overweight.” IBM gained 16 cents to $87.32, while H-P fell 8 cents to $18.98.
Chiron Corp., maker of half the U.S. supply of flu vaccines, cut its profit outlook for the year after the British government pulled the company’s manufacturing license. Chiron tumbled $7.44, or 16 percent, to $37.98 on the news.
Declining issues barely outnumbered advancers on the New York Stock Exchange, where volume came to 1.42 billion shares, compared with 1.53 billion on Monday.
The Russell 2000 index of smaller companies was down 1.75, or 0.3 percent, at 587.34.
Overseas, Japan’s Nikkei stock average was flat. In Europe, Britain’s FTSE 100 closed up 0.5 percent, France’s CAC-40 edged 0.1 percent higher for the session, and Germany’s DAX index gained 0.4 percent.