Stocks plunge as oil falls below $50, raising growth worries
Another plunge in the price of oil is driving stocks sharply lower.
Energy companies led the decline as crude dipped below $50 a barrel Monday.
Other stocks also fell as traders worried that the drop could indicate a weaker global economy and possibly lead to a dangerous, wider drop in other prices in the economy.
The Dow Jones industrial average lost 331.34 points, or 1.9 percent, to 17,501.65.
The Standard & Poor’s 500 fell 37.62 points, or 1.8 percent, to 2,020.58. The Nasdaq fell 74 points, or 1.6 percent, to 4,652.57.
Energy stocks plunged 4 percent, as the price of oil closed down $2.65 at $50.04 a barrel. But the declines were broad, and even airline stocks, usually a beneficiary of lower oil prices, ended the day lower.
Economist Fred Crowley said low oil prices will help the economy tremendously and a drop in stocks shouldn’t worry consumers.
“This is one of those whimsical days at the stock market. Everything points to a strong economy,” said Crowley.
He said all signs point to good times ahead for the U.S. economy. He said drops in oil prices mean growth and prosperity ahead for the U.S.
“This should really help drive the economy stronger in the future than it even has in the short term run,” said Crowley.
A Colorado Springs’ moving company, Two Men and a Truck, are thrilled about low prices.
Co-Owner Jeff Walker said the company spends around $400,000 a year on gasoline and diesel for its trucks.
“When you see a dollar less in fuel per gallon, our trucks get 8 miles to the gallon and we are burning several a day so it’s big savings over all,” said Walker.
The money the company is saving on gas could translate to better rates for customers, higher wages for employees or purchases of new trucks in the future.
“In the short term, it’s awesome. Awesome to see the fund you can use to improve your business,” said Walker.
Crowley said these low prices are not here to stay. He expects prices of gasoline to go up by a dollar a gallon by this summer.
