Chevron Among Top Decliners As Dow Plunges 251 Points
NEW YORK (CBS / AP) — A batch of relentlessly gloomy reports about the health of the world economy rocked Wall Street on Thursday, stirring more worry about the stalled recovery and sending the stock market to its second-worst decline this year.
The Dow Jones industrial average fell 251 points to close at 12,574, a drop of 2 percent. The Standard & Poor’s 500 index lost 30 points to 1,326, a decline of 2.2 percent. The Nasdaq composite finished down 71 points at 2,859, down 2.4 percent. The drop in the three stock indexes wiped out their gains for the week.
Material and energy companies, whose fortunes are closely tied to economic swings, took the biggest hits; San Ramon-based Chevron was among the Dow’s leading decliners after the price of oil fell Thursday to its lowest level in almost nine months – $78.20 a barrel.
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Oil fell after reports earlier Thursday from China and the U.S. both pointed to a slowdown in manufacturing. As factories fill fewer orders, they use less energy, and that cuts into petroleum demand.
China’s oil demand rose less than 1 percent in May, the second-smallest increase this year, noted Platts, the energy-information arm of McGraw-Hill Cos.
Oil investors were also disappointed that the Federal Reserve didn’t announce more aggressive moves to stimulate the economy after its meeting this week.
The Fed ended the meeting with a dour outlook for the U.S. economy, cutting its forecast for growth and saying that the unemployment rate won’t fall much more the rest of the year.
“I’m not expecting any better economic news for quite some time,” said independent petroleum analyst Andrew Lipow.
The gloomy forecast is putting more pressure on the price of oil, which has fallen by nearly $32 a barrel, or 29 percent, since its high of $109.77 on February 24. Already, the price has been pushed lower by easing tensions over Iran’s nuclear program, Europe’s debt crisis and weak jobs growth in the U.S.
(Copyright 2012 CBS San Francisco. All rights reserved.)