Wall Street stalls on oil price spike

Wall Street stalls on oil price spike

NEW YORK: Wall Street stalled on Tuesday as volatile oil prices shot briefly above US$50 a barrel before receding, but the movement sent edgy investors scattering to the sidelines for cover.

The Dow Jones Industrial Average closed a meagre 3.18 points or 0.03 percent higher at 10,492.60, while the tech-heavy Nasdaq fell 0.91 points, 0.04 percent, to 2,084.28.

The broad-market Standard and Poor’s 500 index dropped 0.30 points, 0.03 percent, to 1,176.94.

Stocks clawed back some gains just before the close, after falling in the wake of rising oil prices, as oil prices receded under the 50-dollar-a-barrel mark in New York to close at 48.94 dollars on Monday.

“This holiday-shortened, light-volume week has equities particularly sensitive to any twitch in the price of crude,” said Barry Ritholtz, chief market strategist at Maxim Group.

Low trading volumes due to Thursday’s approaching Thanksgiving holiday in the United States also contributed to the nervous mood on Wall Street, which analysts expect to continue into next week.

“The thinness of trading suggests that the markets can be easily pushed around,” Ritholtz said.

On the stock front, fast-food giant McDonald’s Corp. was forced into its second major management change in seven months after Australian chief executive officer Charlie Bell stepped down to concentrate on his battle against colon cancer.

Wall Street largely shrugged off the news on Tuesday, taking confidence from the strong fundamentals of McDonald’s business, according to traders.

The fast-food behemoth closed up 72 cents, or 2.45 percent, at 30.10 dollars.

Bell will be replaced by two McDonald’s insiders: Jim Skinner who will take over as chief executive and Mike Roberts who will become president and chief operating officer, the company said.

Elsewhere, insurer American International Group closed higher amid reports it had made a settlement offer to the Securities and Exchange Commission regarding concerns about some of its business practices.

AIG closed up 1.35 dollars, or 2.15 percent, at 64.20 dollars.

Separate reports indicated that Time Warner was also closing in on a deal with the SEC regarding a regulatory probe into accounting practices at its America Online unit.

Time Warner closed stronger 48 cents, or 2.75 percent, at 17.94 dollars.

Earlier Tuesday, the National Association of Realtors said existing home sales fell 0.1 percent in October to a seasonally adjusted annual rate of 6.75 million units.

The drop was not as steep as some analysts had feared and followed revised sales of 6.76 units in September.