Focus Turns to Fed, Oil Prices
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Stocks spent Monday on the defensive on fears of higher oil prices and interest rates.
Oil prices spiked 7% as another tropical storm headed for the Gulf of Mexico, and a pivotal Federal Reserve meeting on Tuesday had traders wondering whether the Fed will halt its 15-month rate hike campaign in the wake of Hurricane Katrina.
Despite hopes for a break from the Fed until the impact of Katrina becomes clear, Fed funds futures traders on Monday priced in yet another interest rate hike for Tuesday, raising the likelihood that short-term interest rates will continue to head higher.
rose 2% on a pair of acquisitions.
fell 5% on a warning.
tumbled 7% on a technology glitch that caused sales to plummet.