Oil Drops; Stocks Follow

Gray day on Street ahead of Fed's policy meeting
By Nick McMaster,  Newser Staff
Posted Aug 4, 2008 3:35 PM CDT
A sign for a Chevron gasoline station is seen accross the street through a sign for a General Motors dealership in La Grange, Ky., Friday, Aug. 1, 2008.   (AP Photo/Ed Reinke)
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(Newser) – Stocks closed down today, giving back gains from an early rally despite a nearly $4 drop in crude oil prices as worries about economic growth and inflation persisted, the Wall Street Journal reports. The Dow fell 42.17 to close at 11,284.15, the Nasdaq lost 25.40 and finished at 2,285.56, and the S&P 500 shed 11.29 points to settle at 1,249.02.

Dow components Chevron and Exxon Mobil posted losses, while the S&P’s energy sector led declines on plummeting US demand. HSBC, an early subprime mortgage victim, posted a 29% drop in net income for the first half of 2008, depressing financial stocks. Meanwhile, the Commerce Department reported that personal spending grew 0.6% in June, but the increase was all due to inflation, which rose 4.1%.