Oil whacked

At noon: Oil whacked

Monday, July 07, 2008
Sorry, Canada, but you can't blame investors around the world for celebrating the tumbling price of oil on Monday, which sent U.S. indexes slightly higher at midday but has put Canada's benchmark index into a tizzy.

Oil fell to – can you believe it? – the low-low price of $139.57 (U.S.) a barrel in New York, down $5.72 a barrel,[amp]nbsp;possibly because of reduced fears that Iran is about to join the nuclear club, and possibly because investors have the impression that the G8 annual summit will somehow put the global economy back on track. Whatever the cause, oil is still not cheap, but it's moving in the right direction to remove some of the uncertainty surrounding inflation and corporate earnings.

The Dow Jones industrial average rose 63 points, or 0.6 per cent, to 11,351. The broader S[amp]amp;P 500 rose 4 points, or 0.3 per cent, to 1267. Both indexes were heading down again, though. Technology stocks were the clear favourites, after Microsoft Corp. said it would consider taking another run at Yahoo Inc. Yahoo shares rose 11.7 per cent, Apple Inc. rose 2.3 per cent and International Business Machines Corp. rose 2 per cent.

In Canada, the commodity-heavy S[amp]amp;P/TSX composite index fell 117 points, or 0.8 per cent, to 13,893. Energy stocks were by far the biggest drag, with the sub-index tumbling 2.1 per cent. In particular, Canadian Natural Resources Ltd. fell 2.9 per cent, EnCana Corp. fell 2.4 per cent and Canadian Oil Sands Trust fell 4.6 per cent.

However, Potash Corp. of Saskatchewan Inc. provided some relief, rising 1 per cent and contributing 18 points to the benchmark index.


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