Wall Street pared early losses Tuesday as oil price tumbled.
Crude oil fell more than nine U.S. dollars a barrel, as investors concerned that a slowing economy will curtail demand. The first drop of oil price in a week helped stocks rebound from the worst level in a session.
Major indexes tumbled more than two percent in early trading as concerns about financial shares weighed on stocks. Fannie Mae and Freddie Mac tumbled as investors speculated that the U.S. government's support for Fannie Mae and Freddie Mac won't help shareholders. In addition, Oppenheimer's analyst Meredith Whitney predicted bank share will keep falling. Wachovia Corp. slumped.
Moreover, Federal Reserve Chairman Ben Bernanke said "numerous difficulties," such as strains in financial markets, a shaky job market and ongoing weakness in the housing market represent "significant downside risks" to economic growth.
The U.S. Labor Department reported that core inflation at the wholesale level, which excludes energy and food, ticked up by just0.2 percent. But overall wholesale prices jumped by a larger-than-expected 1.8 percent.
The Dow Jones fell 106.01 to 10,949.18. Broader indexes also tumbled. The Standard & Poor's 500 index fell 14.97 to 1,213.33; and the Nasdaq fell 16.14 to 2,196.73.
Source: Xinhua
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