Stocks plunge after
oil prices top $60

NEW YORK » Stocks plunged yesterday, sending the Dow Jones industrials down 166 points as oil prices briefly moved past the psychologically important $60 per barrel level for the first time. Oil's advance accelerated a selloff prompted by poor earnings from FedEx Corp. -- which blamed high fuel prices for its disappointing profits.

FedEx's earnings missed Wall Street's expectations and raised new concerns about oil's impact on corporate profits. That led crude oil futures to creep higher through the day, breaking through the $60-per-barrel barrier. While purely psychological, that move was enough to send stocks tumbling.

A barrel of light crude settled at $59.42, up $1.33, on the New York Mercantile Exchange after peaking at $60.05, an intraday record.

"We always wondered what $60 a barrel oil would cost us, and now we know," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "On top of that, you've got news from FedEx, a transportation company, saying, 'Yeah, oil is hurting us.' That's got the market shaken up a bit."

The Dow fell 166.49, or 1.57 percent, to 10,421.44.

Broader stock indicators also lost substantial ground. The Nasdaq composite index dropped 21.37, or 1.02 percent, to 2,070.66. The Standard & Poor's 500 index was down 13.15, or 1.08 percent, at 1,200.73.

Bonds ended the session with a minimal retreat, gaining back some early losses as FedEx's concerns about oil sent the market tumbling in the afternoon. The yield on the 10-year Treasury note rose to 3.95 percent from 3.94 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

In addition to oil, Wall Street was disappointed by comments by Federal Reserve Chairman Alan Greenspan, speaking before the Senate Finance Committee. Greenspan said there's "no credible evidence" U.S. manufacturing or jobs would be helped by China revamping its currency system -- a disappointment to many hoping that such a move would aid the U.S. economy.

The surge in oil prices have kept the market from building on last week's gains and deepened investors' concerns over whether the May-June rally stocks have enjoyed would ultimately be curtailed. Some investors also kept to the sidelines ahead of the Fed's decision on interest rates next Thursday and the usual end-of-quarter volatility expected next week.