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global market panic as oil price hits record

Dow Jones leads global market panic as oil price hits record

By James Quinn in New York

Last Updated: 1:03am BST 27/06/2008

Global stock markets tumbled as a weak dollar pushed the oil price over $140 a barrel for the first time in London and New York.

  Global stock markets tumbled as a weak dollar pushed the price of oil over $140 dollars a barrel for the first time
The Dow Jones Industrial Average fell more than 358 points

In New York, the benchmark Dow Jones Industrial Average had fallen more than 358 points to close at 11453.42 – its lowest level since September 2006 – on fears of further writedowns at major banks and the continuing impact of the high oil price.

The Dow has slumped 9.4pc this month, its worst June since an 18pc tumble in 1930 during the Great Depression. 

Amid frantic scenes across trading rooms, the technology-focused Nasdaq also suffered, down 79.89 points at 2,321.37, while the broader S&P 500 broke through the psychologically-important 1300 level, down 38.82 points at 1,283.15.

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  • The picture was similar across Europe. London’s FTSE 100 index closed down 147.9 points at 5,518.2, while Germany’s DAX and France’s CAC-40 fell more than 2pc.

    City Index warned that the FTSE 100 index could close up to 100 points lower this morning. Roger Hambury, head of trading at City index, said: “This could be very nasty.”

    On Wall Street, banks were hit by downgrades by leading City analysts.

    Goldman Sachs analyst William Tanona warned that Citigroup would take a further $8.9bn in writedowns for the three months to June, leading the bank to cut its dividend for the second time in a year.

    Citigroup shares touched a 10-year low of $17.53.

    Shares in the banking sector were among the biggest victims, with those of Bank of America and Merrill Lynch both down 7pc, in spite of reports last night that the US Federal Reserve is working on steps to make it easier for private equity firms and others to invest in the sector.

    Bruce McCain, head of investment strategy at US Key Private Bank, said: “Most investors are going to sit on the sidelines until they’re more certain the sharks have left the waters and it’s safe to go back in.”

    General Motors hit a 53-year low after Goldman Sachs said the market for vehicle manufacturers continued to deteriorate “which exacerbates liquidity concerns about the company”, despite chief executive Rick Wagoner publicly dismissing the liquidity concerns.

    Technology companies were also hit, after worries over BlackBerry-maker Research In Motion’s future growth potential, and a weak profit outlook from Oracle.

    The spike in the oil price was caused in part by comments from Opec president Chakib Khelil, who said prices were likely to rise to between $150 and $175 a barrel over the summer. In London, Brent crude climbed $5.89 to a record high of £140.22 a barrel, while in New York light sweet crude hit $140.39 at one stage.

    In an interview on French television, Mr Khelil said much would depend on the European Central Bank’s policy on the euro, and the continuing nuclear situation in Iran – a major oil producer. His comments sent oil futures soaring. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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