U.S. Stocks Drop as Oil Reaches $60; Transportation Shares Fall

U.S. stocks dropped after oil prices climbed to a record $60 a barrel, renewing concern that higher energy costs will hurt corporate profits. Transportation companies including FedEx Corp. led the decline.

FedEx, the No. 2 U.S. package-shipping company, said earnings will trail analysts’ estimates in the next fiscal year.

“Fuel costs are a problem,” said David Tice, manager of the Prudent Bear Fund, which oversees more than $400 million in the U.S. Virgin Islands. “Most companies don’t have pricing power to continue to pass that through. We believe this market is going to be lower in the next 18 months.”
Bloomberg