New York – Declining oil prices and weakness in other commodities sent stocks lower Tuesday, as investors took profits and beat up the stocks that led Wall Street’s early-January rally.
Gold, silver, oil – “anything you can drop on your foot and it hurts” – is retreating, said Gary Kaltbaum, a money manager in Orlando, Fla.
The run-up in commodities prices “went too far too fast,” he said. Copper prices, for instance, broke through $4,000 a ton three months ago and passed $5,000 a ton last week, according to Merrill Lynch.
Investors sold off oil-sector stocks after oil futures dropped more than $2 a barrel, but they didn’t move their money into financial or semiconductor stocks, as they did the last time oil dropped, said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds.
“A lot of (the selling) is technical,” he said. “People are selling off the winners they had in January.”
The Dow Jones industrial average fell 48.51, or 0.45 percent, to 10,749.76.
Broader stock indicators were also lower. The Standard & Poor’s 500 index fell 10.24, or 0.81 percent, to 1,254.78, and the Nasdaq composite index fell 13.84, or 0.61 percent, to 2,244.96.
Bonds fell, with the yield on the 10-year Treasury note rising to 4.57 percent, up from 4.54 percent late Monday. The U.S. dollar was mixed against other major currencies in European trading.
Crude-oil futures dropped as U.S. weather remained mild, petroleum inventories remained strong and fears receded over possible disruptions to Iranian oil. A barrel of light crude settled at $63.09, down $2.02, in trading on the New York Mercantile Exchange.
The mood on the Street seems to have changed, with investors returning to the jitters that largely defined 2005.
While Tuesday’s earnings surprises were positive, with Walt Disney Co. and Emerson Electric Co. beating analysts’ expectations, they weren’t enough to send the indexes higher.
