U.S. stocks fell today on news that core wholesale inflation spiked up in April, while crude oil prices headed for $130 a barrel.
The Dow Jones industrial average closed down 199.48, or 1.53%, at 12,828.68; the S&P 500 fell 13.23, or 0.93%, ending at 1,413.40; and the Nasdaq composite closed down 23.83, or 0.95%, at 2,492.26. All numbers are preliminary.
The Labor Department reported that the core Producer Price Index, which excludes food and energy items, rose a higher-than-expected 0.4% last month and 3.0% over the past 12 months, its fastest pace since 1991. Overall PPI inflation, which was up 0.2% in April, has risen at a 6.5% rate over the past year, largely due to energy prices.
Oil investor T. Boone Pickens, citing rising demand, told CNBC he expected crude oil prices to hit $150 a barrel later this year. Meanwhile, oil futures for June delivery set an intraday record of $129.60 on the New York Mercantile Exchange before ending at a new closing high of $129.07. Analysts at Goldman Sachs Group last week predicted that crude oil could climb to $200 a barrel this year.
The longer Saudi Arabia does not respond by increasing output sufficiently, the more likely it becomes that they simply do not have enough spare capacity to do so, analysts at Credit Suisse Group in London said in a research note today.