0

Wave of bad news sends Dow down

NEW YORK - A barrage of bad news, including yet another record high for oil, drove stocks sharply lower Thursday, hurtling the Dow Jones industrials down nearly 360 points to their lowest level in almost two years.

The market also worried about fresh signs of trouble in the financial, high-tech and automotive industries. Negative analyst comments sent shares of General Motors Corp. stock to their lowest point in more than three decades.

Oil futures shot past $140 after the head of OPEC predicted the price of a barrel of crude could rise well over $150 this year, and Libya said it may cut oil production.

That increases the odds that gasoline prices, which crossed a nationwide average of $4 per gallon weeks ago, will extend their advance, and that goods and services across the economy will get ever more expensive.

The Dow dropped 358.41 points, more than 3 percent, to close at 11,453.42 - its lowest finish since Sept. 11, 2006. Investors rushed for the safety of Treasury bonds, regarded as a haven when the stock market is in turmoil.

The blue-chip index is now 19 percent below its record close last October of 14,164.53.

Oil was far from the only worrisome factor driving stocks lower.

Citigroup Inc. stock fell sharply after an analyst give it a 'sell' rating and warned investors to expect less from the brokerage sector in an uneasy economy.

Disappointing forecasts from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors' moods and made the tech sector one of the steepest decliners.

Broader stock indicators also fell sharply, although not to their mid-March lows. The Standard & Poor's 500 dropped 38.82, about 3 percent, to 1,283.15, and the Nasdaq composite slid 79.89, or 3.3 percent, to 2,321.37.

The Dow and the S&P, which is off 18 percent from its highs of last fall, are close to the prolonged 20 percent decline that traditionally indicates a bear market. Many analysts would argue Wall Street has had a bear market mentality for months.

On Thursday, the unnerving forecast about oil prices raised the specter of higher inflation and more damage to the economy.

OPEC President Chakib Khelil was quoted as telling a French television station that oil could rise to between $150 and $170 per barrel this summer before pulling back later in the year.

That and a falling dollar helped send light, sweet crude as high as $140.39 and to a record settlement of $139.64 on the New York Mercantile Exchange. Rising oil has saddled nearly all parts of the economy with higher costs.

All the bad news overshadowed a report by the National Association of Realtors that sales of existing homes edged up in May for only the second time in the past 10 months.