Wall Street mixed day

A mixed Thursday trading saw investors hang fire on a rise in oil prices and follow a call by an analyst at Ladenburg Thalmann who signalled a ‘buy’ indication on shares in the fourth biggest investment bank in the IS, Lehman Brothers.

The belief is that Lehman has become a candidate for hostile takeover, easing recent concerns in a financial sector crippled by continuing mortgage debt, and in Lehman Brothers, too.

Oil on the rise

Oil process rose by over $5 a barrel as the ongoing tensions between Russia and the rest of the world showed no sign of easing, with concern that the situation may lead to problems with distribution and availability fro Russia, currently ranked second in worldwide oil production.

Rises in oil tend to escalate inflation fears on wall Street, and such are already rampant as things stand.
The day saw the Dow Jones industrial average close at 11,430.21 – a rise of 12.78 or 0.11 percent, this being the second day of small gains for blue chip stocks following the heavy losses of earlier in the week.

The Standard and Poor 500 index gained 0.25 percent, and Nasdaq saw a fall of 0.36 percent.

Consumer concern

The rise in oil prices – although to a level far below the all time high of January – presents concerns as prices for consumers and businesses are rising at a faster rate than predicted.

Crude rocketed by $5.62 to $121,18 in the New York Mercantile Exchange, falling slightly from a high of $122.04, the highest since early August.

Shares in energy companies Exxon Mobil Corp. and Chevron Corp climbed as a result of the oil price rise, with the former climbing $1.54 to $80.35 ad the latter $2.06 to $88.52.

Other areas suffered as a result of the surge in oil, with UAL Corp, United Airlines Parent Corporation, falling by 8.6 percent and Continental Airlines Inc by 5.4 percent.

A larger than was expected fall in unemployment claims, signalling a fall in the number of newly out of work hands, had little effect on the market as investors concentrated on the financial sectors.

The Labor department figures show claims falling by 13,000 to 432,000 in the last week, although the four-week average reached a seven-year high of 445,750.

The uncertainty of the job market has had a negative effect on consumers coupled with the current credit crunch, consistently rising costs and falling prices and uncertainty in the housing market. Investors see this, and are troubled as two thirds of US economic activity is accounted for by consumer spending.