The price of oil surged more than $6 a barrel Friday morning, the biggest gain in more than three months, sending the stock market into a nose-dive and reversing Thursday’s gains.
By ABHA BHATTARAI
Investors are worried that the rising price of oil, coupled with bleak unemployment data that was released Friday morning, will continue to hurt businesses and suppress consumer spending in an already-weak economy.
In addition, a report by Morgan Stanley on Friday said that oil prices could reach $150 a barrel by July 4 because of higher demand in Asia.
The Dow Jones industrials were down 234 points, or 1.85 percent in mid-morning trading, with financial stocks taking the biggest hit. The Dow was also dragged down by shares of American International Group, which stumbled after accusations that the company may have overstated the value of contracts tied to subprime mortgages. Shares of A.I.G. fell $2.43, or more than 6 percent, to $43.98.
The Standard & Poor’s 500-stock index fell 22.79 points, or 1.6 percent, while the Nasdaq composite index fell 37.76 points, or 1.5 percent.
Oil was up more than $6.10 a barrel, or about 5 percent, to $133.89 within the first hour and half of trading, hitting a new record high. The spike came despite no specific disruption in the oil market, suggesting that the move was based on speculation.
NVDL: Banks are taking a big hit. I hope, if you're reading this, you don't have money in bank stocks.
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