Just when you take your eye off the price of crude oil, it can do remarkable things. It shot up to $126.50 (U.S.) a barrel on Tuesday at midday, following a report from the International Energy Agency that U.S. supplies of distillate fuels fell 2.6 per cent below the five-year average.
If that doesn't exactly sound like a reason to panic, remember that this is oil we're talking about – and it doesn't take much to send investors scrambling.
The energy-heavy S&P/TSX composite index fell 70 points, to 14,596 at noon. Potash Corp. of Saskatchewan Inc. and Research In Motion Ltd. were among the biggest drags on the index's performance, tumbling 2.1 per cent and 2 per cent, respectively. Meanwhile, financial stocks were flat.
Energy stocks were down about 0.6 per cent, indicating that equity investors aren't riding oil's most recent wave. Materials were also hit, with gold falling to $870 an ounce, down $13.
The Dow Jones industrial average fell 79 points, to 12,798. There, Hewlett-Packard Co. was the biggest drag, falling 6.8 per cent on concerns that its $13-billion deal for Electronic Data Systems Corp. is a tad too expensive. Citigroup Inc. fell 1.7 per cent and Microsoft Corp. fell 1.4 per cent.
The broader S&P 500 fell 5 points, to 1398. Exxon Mobil Corp. was the biggest boost for the index, but rose just 0.6 per cent. JPMorgan Chase & Co. fell 1.8 per cent and Wal-Mart Stores Inc. fell 2.2 per cent.
