New York – Wall Street finished essentially flat Wednesday, with investors still confident the Federal Reserve will lower rates next week but treading cautiously as oil prices crossed $80 a barrel for the first time and the dollar extended its decline.
Investors widely expect the central bank to lower the benchmark federal funds rate Tuesday by a quarter percentage point. The decision has not been guaranteed, though, and many investors worry that a quarter-point rate reduction might not be enough to address investors’ worries over the ongoing housing slump and credit-market tightness.
Meanwhile, crude oil’s spike above $80 a barrel, the highest it’s ever been in intraday trading, and a weakening dollar fed concerns about inflation. Accelerating inflation is not only a threat to consumer spending – a pillar of the economy that Wall Street fears is weakening – but it also gives the Fed a reason to keep rates where they are.
Crude oil settled at a record $79.91 a barrel on the New York Mercantile Exchange after the U.S. government reported declines last week in crude and gasoline supplies.
The Dow Jones industrial average fell 16.74, or 0.13 percent, to 13,291.65, after weaving in and out of positive territory throughout the session. A day earlier, the blue-chip index soared 180 points.
Broader stock indexes were narrowly mixed. The Standard & Poor’s 500 index rose 0.07, or less than 0.01 percent, to 1,471.56, and the Nasdaq composite index fell 5.40, or 0.21 percent, to 2,592.07.
The dollar extended its slide against the euro, hitting a record low. The dollar also weakened against the yen.
