Stocks Fall and Oil Gains for Second Day on Libyan Violence

Stocks fell for a second straight day Wednesday, and oil prices briefly crossed the $100-a-barrel mark after violence escalated in Libya and tech bellwether Hewlett-Packard (HPQ) delivered a disappointing sales outlook.

The Dow Jones Industrial Average ($INDU) lost 107 points, or 0.9%, to close at 12,106. The blue-chip index was off as much as 149 points in midday trading before paring its loss. The broader S&P 500 ($INX) fell 8 points, or 0.6%, to finish at 1,307. The tech-heavy Nasdaq Composite ($COMPX) declined 33 points, or 1.2%, to settle at 2,723.

Forces loyal to Libyan leader Moammar Gadhafi continued their assault on anti-government protesters, leading to widespread chaos and shooting in the streets of the Libyan capital, Tripoli, the Associated Press reported. Nearly 300 people have been killed in the uprising so far, according to the New York-based Human Rights Watch.

The increasing violence in Africa's third-largest oil producing nation sent oil prices soaring again. Benchmark crude traded on the New York Mercantile Exchange rose another $3.07, or 3.2%, to close at $98.49 a barrel, its highest close since October 2008. Contracts broke above $100 a barrel at one point during the session. Crude oil hasn't closed above the triple-digit level since September 2008.

Libya is the world's 15th-largest exporter of crude oil, contributing 2% of global daily output. Fears that anti-government unrest could spread to other oil-producing nations in the region have caused crude oil futures to spike nearly 14% in less than a week.

The flight to safer assets punished equities around the globe, as did some disappointing corporate news. Hewlett-Packard weighed most heavily on the Dow after the tech giant issued a weak revenue forecast late Tuesday. The blue-chip index's decline was tempered somewhat by energy giants Exxon Mobil (XOM) and Chevron (CVX), shares of which rose sharply, thanks to the spike in oil prices.

The flight to safety also boosted gold prices, which notched a seven-week high Wednesday. Gold futures traded on the Comex division of the NYMEX rose $9.40 or 0.6%%, to finish at $1,411 an ounce.

In other corporate news, Lowe's (LOW), the nation's second-biggest home improvement retailer after Home Depot (HD), said fourth-quarter profit rose 39% to beat Wall Street's forecast, but a disappointing outlook hurt shares.

In U.S. economic news, existing-home sales rose 2.7% in January, but the increase was due to a rising number of foreclosures and all-cash deals rather than growth in the number of first-time home buyers.

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Time to drag out the bicycles and drive to work...that is if you have a job. Better yet, stay home and collect a welfare check. Drink a beer and watch NASCAR. Meanwhile the Fatcats get even fatter,.

February 24 2011 at 6:17 AM Report abuse -1 rate up rate down Reply
Robert & Lisa

Libya is not the real reason for our markets dropping and commodities surging. Our and the other coutries failed socialist policies are.

February 24 2011 at 5:23 AM Report abuse +2 rate up rate down Reply
1 reply to Robert & Lisa's comment

If you are in a home and want to refinance, 2 things are absolutely key. First, you must have meaningful equity in your home. Second, you must have a good credit score. But in this economy if you do not have both of them still you could get a good rate, Search online for "123 Mortgage Refi" they gave me the lowest rate of 3.45% my credit history is not so good.

February 24 2011 at 2:04 AM Report abuse -1 rate up rate down Reply

Why do we not have an aircraft carrier and support near the Suez Canal to protect our interests...aka: Crude Oil.

February 23 2011 at 10:50 PM Report abuse +1 rate up rate down Reply

The damage Bush did could have been fixed in a year. The damage the man child in the white house is doing will take ten years to fix.

February 23 2011 at 7:50 PM Report abuse +3 rate up rate down Reply
1 reply to tj1108's comment

Hey liberal partisans, Did not dumb and dumber keep telling you big oil was backed by the oil companies and they were going to stop speculation? Hope you did not forget that 2009 promise? Wonder why they do not, the taxes they collect. You are so dumb it is funny thinking it is one party versus another regarding energy!

February 23 2011 at 7:23 PM Report abuse +2 rate up rate down Reply

Oh Lord, not blame the evil oil companies again! Don't these kids know how to read? Or have any common sense?

February 23 2011 at 7:12 PM Report abuse +6 rate up rate down Reply

drill baby drill

February 23 2011 at 5:55 PM Report abuse +8 rate up rate down Reply
1 reply to bdhauto's comment

Yeah that's good. Remember the BP Cleaup ? Who wouldn't want MORE of that !

February 24 2011 at 6:19 AM Report abuse -1 rate up rate down Reply
John Kiegiel

It is the market makers that have created the spike. Can you imagine how many of the OPEC producers would like to produce more? All of them. The crooks are right here and no one wants to stop it because too many power people are involved.

February 23 2011 at 5:38 PM Report abuse +2 rate up rate down Reply
2 replies to John Kiegiel's comment

I agree oil,utilities, and banking should all be under still regulations in this country. These items effect our economy and everyone's basic household costs. They have stated that they just found a huge oil deposit that is on the border of Minnesota, North Dakota,and south Dakota. This find is larger then all of OPEC. This oil should not be allowed to be sold on the world market along with all the oil from Alaska and the gulf of Mexico. Our government if they had the balls should take us off foreign oil. We have enough in this country now to support our needs for over 200 years. If the US announced they were no longer going to purchase foreign oil the price on the world market would drop like a rock.

February 23 2011 at 6:45 PM Report abuse rate up rate down Reply

Regulate your own household Kenneth...

February 23 2011 at 10:53 PM Report abuse +1 rate up rate down Reply

I can remember when Bush and Chaney were in office and oil prices went up it was all there fault. So now who is to blame??? It is gonna get a lot worse real soon and all of us are going to pay, pay, pay. They always find somethig in the Middle East for causing it. Let me ask this question. How much oil do we get from Lybia? Not a damn drop.

February 23 2011 at 5:28 PM Report abuse +7 rate up rate down Reply
1 reply to davec337's comment

Prove it...

February 23 2011 at 10:54 PM Report abuse -1 rate up rate down Reply