Inventories slide, oil slips as US releases crude reserves | Economic news
By DAMIAN J. TROISE, AP Business Writer
Stocks fell slightly at midday on Wall Street Thursday and oil prices fell as President Joe Biden ordered the release of up to 1 million barrels of oil a day from the country’s strategic petroleum reserve.
The move to pump more oil into the market is part of an effort to control energy prices, which have risen around 40% globally this year.
The S&P 500 fell 0.2% at 11:41 a.m. EST. The Dow Jones Industrial Average fell 126 points, or 0.4%, to 35,101 and the Nasdaq fell 0.2%.
Communications stocks were among the largest weightings in the market. Netflix fell 1%.
Banks also fell with bond yields, which they rely on to charge interest on loans. The 10-year Treasury yield slipped to 2.33% from 2.36% on Wednesday night. Citigroup fell 1.7%.
US crude oil prices fell 4.1% and Brent, the international standard, fell 3.2%. The pullback slightly reduced the surge in oil prices amid Russia’s invasion of Ukraine. The dispute has raised fears that the tightening of supply could only worsen the persistent inflation that threatens businesses and consumers around the world.
A Commerce Department inflation gauge jumped 6.4% in February from a year ago, marking the biggest year-over-year rise since January 1982.
Energy prices have been a key factor in driving up inflation and Biden’s plan to release more oil into the system comes as little relief is expected from the OPEC oil cartel. The cartel and its allied oil producers, including Russia, are sticking to a modest increase in the amount of crude they pump around the world, a step that is supporting higher prices.
Rising prices for everything from energy to food have been a major concern for central banks around the world, who are poised to raise interest rates to soften the impact. Investors have been trying to gauge how the economy and businesses will fare amid rising inflation, higher interest rates, the war in Ukraine and other factors. It made for a turbulent start to the year.
The benchmark S&P 500 is on track to end March with a 5% gain after losses in January and February. The index is on track for a 3.6% loss in the first quarter, marking its first quarterly loss since the first quarter of 2020, when the pandemic knocked global markets and the economy down.
Investors received a lukewarm update on the labor market on Thursday. More Americans applied for unemployment benefits last week, but layoffs remain at historic lows. Wall Street will get a fuller report on Friday when the Labor Department releases jobs data for March.
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