Renewed investor concerns about the economic situation and a spike in oil prices overshadowed optimism on Wall Street on Monday regarding the largest acquisition by a private equity fund in the world to date, leading the major stock indices to close in the red.
The New York Dow Jones index fell by 0.12 percent, to 12,632 points. The technology Nasdaq weakened by 0.4 percent, to 2,505 points. A barrel of crude oil increased by 25 cents, to $61.39 on the New York market as Iran and the United Nations tussle over Tehran’s nuclear program. This has heightened concerns in the stock market about rising energy costs and inflation, which could undermine corporate earnings. The most significant sell-offs were seen in shares of financial institutions, sensitive to changes in interest rates, as well as technology stocks. The price of gold, on the other hand, surged close to the psychologically important threshold of $700 per ounce, reflecting investor nervousness over Western disputes with Iran.
Investors are also engaging in profit-taking sales of stocks following a recent strong surge in their prices. The trigger for these sales was a media report that former Federal Reserve Chairman Alan Greenspan stated that a recession in the U.S. is possible by the end of the year. "The market is tired, and it is not too happy to hear from the former Fed chairman about a possible recession," noted Al Goldman, a market strategist at A.G. Edwards.
