Wall Street end Mixed Amid Inflation Fears

February 20, 2008

The major indices on Wall Street opened sharply higher on Tuesday and gave up a big early advance and closed mixed with modest losses due to weakness in financials and tech. Stock investors were concerned after the oil prices closed above $100 for the first time and put fuel on fears that inflation will baffle on already troubled economy. The rising inflation fear might make the Fed think again its preconception in the direction of lowering interest rates to help the troubled economy.

The market mood seems more cautious at this point of time. Investors are positioning themselves ahead of important economic reports that could give the stock market further direction. The most important economic data will be Wednesday's Labor Department report on consumer prices for January.

The hardly hit sector on Tuesday was Financial. As it is know that banks are facing more financial problems this year that dragged the sector sharply lower. There are reports that Lehman Brothers may face its rockiest quarter since the mortgage crisis began, noting it may face $1.3 billion in additional write-downs. Additional to this, the selling pressure came from the news that Credit Suisse had overvalued assets by about $2.85 billion, with the company blaming a small number of traders for the write-down.

The Dow Jones industrial average fell 10.99, or 0.09%, to 12,337.22 after being up more than 150 points earlier in the day stock trading session. The Standard & Poor's 500 index fell 1.21, or 0.09%, to 1,348.78; and the Nasdaq composite fell 15.60, or 0.67% to 2,306.20.