Retail Swoon, Oil Boom Slams Stocks

I've been saying this for months - that the price of oil in the futures markets is unsustainable and may be sowing the seeds of catastrophe for the markets and world economy - and today, finally, that thinking has come home to roost.

While the oil monopolists were boosting the price of light sweet crude another 62 cents - to close at $72.81 - stocks in New York were taking a beating. Adding to the malaise were inconsequential comments from Ben Bernanke, who is beginning to look more and more like a one-term paper tiger, earnings warnings from Home Depot (no surprise there) and Sears, and some more sobering news on the sub-prime front, all of which added up to a big, fat bummer for US investors.

Dow 13,501.70 -148.27; NASDAQ 2,639.16 -30.86; S&P 500 1,510.12 -21.73; NYSE Composite 9,953.57

Get ready for a dramatic turn-around for stocks, if today's trading was any indication. Of course, the markets themselves may have sent a powerful message with the losses, and it just may wake up some people as to the potential for long-term damage by oil prices in the sky. The remaining days of this week should be telling.

The damage was widespread, affecting all sectors and industries, though retailers were hardest hit. Declining issues led advancers by a 3-1 margin, while new highs eked out a win over new lows, 260-220. Once again, this stumbling could be just the silver lining of the dark cloud suddenly settling over Wall Street. It's a bit premature to make predictions, and tomorrow's follow-through (or lack of one) will be telling.

This kind of sharp move, however, is indicative of turning points, and there have been no lack of them lately, though the markets always seem to find a way to survive and move ahead. It's going to be a very bumpy earnings season.

Gold and silver made minor moves to the plus side.