Most U.S. Stocks Rise, Oil Drops Below $100; Swiss Franc Gains
Oil Rises on Libya, Dragging Stocks Lower on Growth Concern
Bloomberg
Oil rose above $100 a barrel in New York as Libya’s uprising cut supplies from Africa’s third-biggest producer, dragging U.S. stocks and agricultural commodities lower amid concern that surging energy prices will limit growth.
Oil rose above $100 a barrel in New York as Libya’s uprising cut supplies from Africa’s third-biggest producer, dragging U.S. stocks and agricultural commodities lower amid concern that surging energy prices will limit growth. Source: Bloomberg
Feb. 23 (Bloomberg) -- U.S. Secretary of State Hillary Clinton, Pacific Investment Management Co.'s Mohamed El-Erian, and Chakib Khelil, former Algerian oil minister, discuss the crisis in Libya and its impact on oil prices and the global economy. This report also includes comments from Muammar Qaddafi, Libya's head of state, Jonathan Barratt of Commodity Broking Services Pty and Fatih Birol of the International Energy Agency. (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Philip Weiss, an analyst at Argus Research, talks about the political turmoil in Libya and its impact on the oil market. Weiss, speaking with Margaret Brennan on Bloomberg Television's "InBusiness," also discusses the exposure of Marathon Oil Corp., Hess Corp., and Occidental Petroleum Corp. to the unrest in the Middle East and North Africa. (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Daniel Arbess, a partner at Perella Weinberg Partners LP and manager of the Xerion fund, discusses the impact of the uprising in Libya on oil prices and his investment strategy. Arbess talks with Betty Liu and Jon Erlichman on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Johannes Benigni, managing director of Vienna-based research consultant JBC Energy GmBH, discusses the Libya crisis and its impact on oil prices. He talks with Andrea Catherwood on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Most American stocks rose and oil retreated below $100 a barrel after the U.S., Saudi Arabia and International Energy Agency said they could offset any supply disruptions from Libya. Yields on 30-year Treasuries fell to the lowest level this month, and the Swiss franc climbed to a record against the dollar.
About four stocks gained for every three that fell on U.S. exchanges at 4 p.m. in New York. The Standard & Poor’s 500 Index lost 0.1 percent for the third straight drop. Crude futures slumped 0.8 percent to $97.28 a barrel after touching $103.41, the highest intraday price since Sept. 29, 2008. Treasury 30- year yields decreased to 4.54 percent from 4.58 percent. The franc strengthened to a record 92.34 centimes per dollar.
Equities rebounded today after oil declined and reports showed jobless claims fell and consumer confidence increased. The S&P 500 had lost 2.7 percent this week, the biggest two-day slide in six months, as crude extended its surge since Feb. 15 to 16 percent after Libyan protests intensified. Oil slipped today after President Barack Obama said the U.S. will be able to “ride out” a cut resulting from turmoil in the North African nation. The crisis has trimmed supply by 500,000 to 750,000 barrels a day, the IEA said today.
“We need to have a bit more clarity on how bad this oil situation could become,” said David Kelly, who helps oversee $450 billion as chief market strategist at JPMorgan Funds in New York. “In the long run, I don’t see the world oil production being affected. If what’s going on isn’t enough to derail what seems to be a strengthening U.S. expansion, then it’s just a minor correction, not another bear market. In such a case, stocks will rebound and this will be a buying opportunity.”
Boeing, GM
Boeing Co. added 0.8 percent as government data showed demand for aircraft rebounded. It rose another 3.4 percent at 5:57 p.m., following the close of U.S. stock exchanges, after winning a $35 billion program to build 179 aerial refueling tankers from the U.S. Air Force.
Priceline.com Inc. soared 8.5 percent as the online travel agency’s earnings forecast beat estimates. General Motors Co. tumbled to $32.05, the lowest price since its initial public offering in November, as oil’s recent surge dimmed the outlook for truck sales. Exxon Mobil Corp. and Schlumberger Ltd. dropped more than 1.2 percent as crude oil fell.
The IEA said that it is ready to release emergency oil stockpiles, if needed. The Paris-based agency, founded in 1974 in response to the Arab oil embargo, advises 28 developed nations, including the U.S., Japan and Germany.
‘Will Stabilize’
“We actually think that we’ll be able to ride out the Libya situation and it will stabilize,” Obama said to members of his outside council on jobs and competitiveness at the White House.
Reuters reported that oil declined as traders speculated that Libya’s Muammar Qaddafi had been shot. The news service then quoted an unidentified U.S. official who said the government had no reason to believe Qaddafi is dead.
Qaddafi, who has lost control of much of the country’s oil- rich east, blamed the uprising against his 41-year rule on “drugged kids” and al-Qaeda as Switzerland froze some of his assets. Libya is Africa’s third-biggest oil producer.
Qaddafi, speaking by telephone on state television today, appealed to citizens to end violence while his forces stepped up a crackdown on opponents and moved tanks into positions defending the capital, Tripoli. He said he regretted the deaths during the unrest, which protesters blamed on pro-government forces opening fire on regime opponents and random civilians.
Fed Purchases
Ten-year Treasury yields reached a three-week low of 3.41 percent as the U.S. auctioned $29 billion in seven year notes in the final of three sales this week totaling $99 billion. The yield touched the lowest since Feb. 2 as loyalists of Muammar Qaddafi sought to crush dissent in Libya. The Federal Reserve purchased $5 billion in Treasuries with maturities ranging from November 2012 to August 2013 today as part of its planned $600 billion in purchases to support the economy.
The Swiss franc strengthened to a record 92.34 centimes per dollar before trading at 92.64 at 5 p.m. in New York, up 0.7 percent from 93.30 yesterday. The euro rose 0.4 percent to $1.3800, after climbing to $1.3821, the strongest since Feb. 3.
The yen appreciated 0.8 percent to 81.89 per dollar, its seventh straight day of gains, the longest run this year. It touched 81.63, the strongest level since Feb. 4. The Japanese currency was 0.4 percent stronger at 113.02 per euro.
Asian Currencies
Asian currencies slid on speculation the global economy will slow as oil prices surge. Taiwan’s dollar dropped 0.8 percent to NT$29.80, the worst performance among the dollar’s 16 most-traded counterparts. South Korea’s won was the second- worst performer, dropping 0.6 percent to 1,131.05 per dollar.
The euro briefly extended gains as a member of the ECB Governing Council, outgoing Bundesbank President Axel Weber, said interest rates can only rise in the future.
“Interest rates know only one direction, and that is north,” Weber said in a panel discussion in Frankfurt today.
ECB policy makers will make the decisions necessary to maintain price stability, President Jean-Claude Trichet told reporters yesterday in Frankfurt. The bank, which meets March 3, has kept its benchmark rate at 1 percent since May 2009.
To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
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