Frankly, I'm surprised the stock market held up as well as it did today, given that oil reached an all-time high of $57.60 (it closed at $56.40 a barrel). The recent spike signals trouble for consumer spending and corporate earnings as companies and individuals spend more on energy than anticipated.
So why did the stock market take higher oil in stride today? (The Dow closed down just 7 points and the S&P 500 was up 2 points). Partly because GM's disastrous earnings warning (it stands to lose $1.50 a share this quarter), already shook out so many sellers yesterday. And partly because some investors think higher oil is a temporary aberration.
But I just saw Michael Panzner, head trader at Rabo Securities and guy I talk to frequently, quoted in another publication. He points out that there are some technical issues that may have kept investors form selling in force today -- like the recalibration of the S&P and triple-witching.
He thinks there is more selling to come once investors really think about what higher oil means -- especially if it goes even higher from here.
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