Will stocks fall as commodity prices rise?
*The Wall Street Journal, by Peter A. McKay, June 16, 2008
“As Oil Soars, Stocks Stumble
Stocks languished as oil prices hit new intraday records near $140 a barrel on Monday despite reports of a production increase from Saudi Arabia.
There were news reports over the weekend that the kingdom, which is the world’s largest oil exporter, is preparing to pump more crude in the days ahead. But it remained unclear how big the increase would be, with reports varying between 200,000 and 500,000 barrels a day. Also, many analysts believe that any additional oil from Saudi fields would not be the low-sulfur grade of crude used as the benchmark for prices in the U.S.
Uncertainty over the plan, along with a selloff in the dollar, helped to push crude prices sharply higher Monday. Crude futures were recently up $2.30 at $137.16 a barrel on the New York Mercantile Exchange, after hitting a fresh intraday record of $139.89.
The move helped to keep fears of both inflation and weak consumer spending alive among stock investors. Major stock indicators were mixed in recent trading.”
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