Stocks Flutter Near the Flat Line
06/10/08 - 01:16 PM EDT
Sarina Penn
"Bernanke in recent comments has emphasized that western central banks stand ready to resist oil-induced recession, when in fact oil price increases are far beyond the control of the Federal Reserve and other central banks to affect," Morici continued. He added that the Fed chief's words "cause markets to believe the Fed will raise interest rates as we travel into a recession and this drives equity prices down, compounding the panic created by rising oil prices."
Gold futures were sliding $25.40 to $869.30 an ounce. Following Bernanke's observations, the U.S. dollar was advancing 1% against the euro and the yen and jumping by more than a percent against the pound and the Swiss franc. Foreign markets were uniformly lower, and one of the hardest hit was China's CSI 300, which plummeted 8.1%. The Nikkei 225 in Tokyo dropped 1.1% overnight, and the Hang Seng Index in Hong Kong sank 4.2%. Among European exchanges, London's FTSE 100, Germany's Xetra Dax and the Paris Cac were all down 0.7% or more. On the U.S. corporate front, chipmaker Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks) narrowed its second-quarter outlook, partially citing weak demand for handheld devices. Shares were falling 1.9%. Elsewhere, both Citigroup and Lehman Brothers bumped up their Apple (AAPL Quote - Cramer on AAPL - Stock Picks) price targets a day after the company released its 3G-enabled iPhone, after which the stock added 2.3%. Separately, Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks) slid 7.1% after Wachovia downgraded the stock to market perform from outperform. Kirk Kerkorian's Tracinda said its offer to buy up to 20 million shares of Ford (F Quote - Cramer on F - Stock Picks) generated a tremendous response, with more than 1 billion shares of the automaker being tendered. However, Tracinda will keep to its plan to limit the purchase to 20 million, spending $170 million overall. Ford shares slumped 2.7%.
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