Crude Oil and Dow Down Following Low Consumer Confidence (XOM, CVX, USO)
February 23, 2010 5:10 PM
Coinciding with news of U.S. consumer confidence hitting a 10-month low, crude oil futures have fallen below $79 a barrel after a steady 5 day rise. Also contributing to the slide is a stronger dollar based on increased concerns on the euro zone economy.
Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX) and the Dow Jones Industrial are all down today amid concerns that the economic recovery, as indicated by the consumer confidence index, still has a long way to go. Shares of United States Oil Fund LP ETF (NYSE: USO) fell $0.70 to $38.33, tracking the value of oil futures.
While the dollar rose against the euro, it fell against the yen. This is a clear sign that the fall of consumer confidence has effected foreign investors' desires for risk.
Everyone is anxiously awaiting Federal Reserve Chairmen Ben Bernake's testimony on monetary policy tomorrow to the House Financial Services Committee. This may have contributed to cautious markets today. All will be watching for his perception of the current economic climate and his forecast for the global economic recovery.
