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.

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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It has become one of most concerning issues of world. It is becoming the reason of a high price level in the consumer market. So the demand and supply of the commodities are badly affected.

Impact on consumer demands

The prices of commodities such as wheat, sugar, salt, spices, bread, vegetables, fruits, meat etc increased at such a huge level that has diminished the demands of the consumers. On the other hand it is the compulsion of the people to buy groceries for their survival.

Increasing oil prices cause inflation

The economic analysts are saying regarding the dilemma of inflation that it is occurred due to the increase in oil prices in United States. One barrel of oil is reached up to $126 a few days ago, which has become the major concern of sustaining the US economy. Furthermore both the political parties of democrat and republican have failed to control upon the inflation and most of the people blamed to US regime.

War against Iraq caused inflation

America has wasted billions of dollars during the recent war against Iraq which has affected the demand and supply in the country. The prices of the every day commodities increased so much that the people have come to the road and motto against the government. So we could say that local people are demolishing in the grind of inflation.

Declining stock market

Meanwhile the stock market of world is facing the perils of inflation due to increase in oil prices and sudden disasters. For example the current earthquake in China has affected the stock market of Asian and Western countries.

Astounding boom in stock market

Yester it was the booming trend when the prices of stock market had increased. That is the inflation which shows us the fluctuating trend of the stock markets. Sometimes it seems to be the boom of stock market and often it looks like a recession of stock market.

Transfer of stock in foreign countries

One of the amazing aspects is deposits. Millions of people around the world are not feeling secure about money. For example the majority of the people of Pakistan are transferring their stocks and money to the accounts of foreign nations such as UAE, Unites States, Canada, and United Kingdom etc. it is just because of heavy inflation.

Inflations causes’ famine

Today there are many countries which are facing the alarms of famine due to inflation and poverty. It is estimated that within next five years, most of the Asian regions such as Pakistan, India, Bangladesh, Indonesia, Sri Lanka, and Afghanistan will be demolished due to the sudden disasters such as hurricanes, tsunamis, storms, famine, earthquakes etc. The regimes of these countries are absolutely careless and they are not taking some serious actions to avoid of the famine dangers.

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The deal between M&M candy maker Mars Inc and Wm Wrigley Jr. Co (WWY.N) which is the world’s biggest chewing gum manufacturer gave some life and hope to the dying M&A market in the country. Berkshire Hathaway owned by Buffett is going to sponsor the $23 billion purchase.

The deal highlighted the view that stocks are rather inexpensive with assessments perched close to their lowest in almost twelve years.

While talking to CNBC television Buffet stated that the decline in economic activity in the U.S would be even longer and deeper that it has been described by many experts in the U.S and other part of the world.

According to the chairman of W.P Stewart Asset Management Jim Awad this deal would help a lot and every body is happy with the deal as it shows a silver lining to dying M&A market and all it became possible just because of Buffet and all credit goes to Buffet.The deal shows still there is enough credit available in it.

A decline of 2.8 percent to $28.99 has been observed in shares of Microsoft Corp (MSFT.O) similarly after letting the deadline unnoticed from Microsoft ,Yahoo shares also declined to 1.4 percent $ 26.43.

While Google‘s shares, which is considered competitor of Microsoft as well as Yahoo reached at $552.12 with a gain of 1.5%.Thus Google proved a top supplier in the gain of NASDAQ.

Wrigly stock got the gain of 23.2 percent and to $76.91.Simialrly,a gain of 9.5% was observed in Ford stock as it reached to $8.21 while a 2.6 percent gain was observed in GM.N that reached $21.94 .

Investors became watchful prior to the meeting of Federal reserves in which interest-rate policy was to decide on Tuesday and Wednesday and it also caused to slow down the trading volume.

There was an exchange of total 1.21 billion shares in the New York stock Exchange and it was quite below previous year’s projected average of per day that was around 1.90 billion

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