After rising oil prices and persisting worries about the financial sector, stocks slowed down on Monday.
The reason behind rising price was the disappointment that Saudi Arabia was not increasing oil production more than 200,000 barrels a day. On the New York Mercantile Exchange, light, sweet crude oil settled at $ 136.74 per barrel with the increase of $1.38.
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There was a rise in energy companies but airlines and financials are the sectors that recoded massive losses.
Now investors are focusing on the price of oil and two-day’s federal meeting that will held on Wednesday. Many investors are expecting central bank to continue its main federal funds rate on hold.
Denis Amato who is chief investment officer at Ancora Advisors in Cleveland raises the question that weakness in areas of the economy how will be balanced by the Fed? The financial sector has concerns about the rising inflation and weak dollar that cause low interest rates.
“The Fed is in a sort of fix, we can say—they take the risk of getting some negative impact on the economy if rates are raised by them and if they act contrarily and don’t raise the rates, they take the risk of influencing the dollar negatively and this is the very trend that rising oil up that weakening economy,” he further added.
The industrial average at Dow Jones fell to 11,842.36 or less than 0.01 percent
After a day of shaky trading, the broader stock indicators closed down mix. The Nasdaq composite index dropped 20.35 to 2,385.74 that was around 0.85 percent.
Related links
- Rising oil prices impact
- Ancora Advisors in Cleveland
- Saudi Arabia pledges to fight rising oil prices
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