The Fog of War at the gas pump. Stocks Fall Sharply After Oil Hits $130 a Barrel

Lee Heidhues 3.7.2022

Thug Putin’s War Crimes of Aggression against The People of Ukraine is now impacting the complacent American consumer wedded to the car.

Perhaps Americans will now pay closer attention to the cruel human disaster being inflicted on a people thousands of miles away from the safe haven of the USA.

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Oil prices rising higher as Thug Putin’s war crimes continue

Excerpted Wall Street Journal 3.7.2022

The Dow Jones Industrial Average dropped more than 700 points, putting the blue-chip gauge on track to enter a correction, as surging oil prices deepened concerns about economic growth.

The Dow industrials were recently down 2.1%, or about 713 points, following four consecutive weeks of losses. At that level they would close in a correction, down at least 10% from their January high.

Global benchmark Brent crude topped $130, the highest level since July 2008, before easing from its highs. Brent advanced 4.3% Monday to $123.21 a barrel, its highest settle value since April 2012.

The S&P 500 dropped 2.7%, bringing its 2022 decline to almost 12%. The tech-heavy Nasdaq Composite lost 3.2% and is down nearly 18% year-to-date. The S&P 500 entered a correction on Feb. 22, while the Nasdaq Composite fell into correction on Jan. 19.

Monday’s losses were broad-based, with nine of the S&P 500’s 11 sectors down in recent trading. The energy group added to its gains for the year while the utilities segment also advanced. The consumer discretionary segment led the decliners, recently dropping more than 4%.

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“The market’s on increasingly shaky ground,” said Hans Olsen, chief investment officer at Fiduciary Trust. “When you combine the price shocks that we’re seeing in the energy complex on one hand and the galloping inflation that we’re dealing with on the other hand, that’s a really tough mix for an equity market to hold valuations where we are right now.”

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Equity investors are worried that sky-high oil prices will fuel inflation and that the war in Ukraine and ensuing sanctions on Russia could hurt businesses based in the U.S.

“The rise in oil is destabilizing the market,” said Jay Hatfield, chief executive and portfolio manager at Infrastructure Capital Advisors. “The market is concerned about the war and its impact on U.S. growth and U.S. companies.”

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