updated 9/20/2005 8:11:35 AM ET 2005-09-20T12:11:35

Stocks tumbled Monday, as heightened fears of another hurricane hitting the Gulf Coast region sent oil prices racing past $67 a barrel and investors grew anxious about the outcome of Tuesday’s Federal Reserve meeting.

Major Market Indices

Wall Street saw some bright spots in merger activity and strong quarterly earnings from Nike Inc. and Carnival Corp., but the market became increasingly uneasy as a surge in oil and gasoline prices threatened consumer spending. Investors were also waiting to see whether the Fed would raise rates or halt its string of increase to curb worries of an economic downturn following Hurricane Katrina.

But with an intensifying Tropical Storm Rita nearing the southern Florida tip and aimed at the Gulf of Mexico, stock prices tumbled.

“Front and center would be concerns of the storm approaching tomorrow, of which you’re seeing crude oil trading up $4,” said Steven Goldman, chief market strategist, Weeden & Co., noting a steep decline in oil prices at midday.

Crude oil prices surged even as OPEC neared a consensus on selling 2 million additional barrels a day to offset the impact of refinery shutdowns. OPEC was also considering raising daily output by 500,000 barrels.

Although Wall Street is uncertain about what the Fed’s decision is likely to be, many analysts are predicting the central bank will continue lifting rates to stem inflation and will keep that as its main priority despite the widespread economic ripple left in Katrina’s wake. The Fed’s policy announcement is expected Tuesday afternoon.

“I don’t see where they’re going to be able to back down with inflation increasing the way it is and oil rising,” said Bill Groenveld, head trader at vFinance Investments.

Groenveld also said Rita has been another concern for the market as it approaches the Gulf Coast, with some meteorologists forecasting the storm could strengthen into a hurricane by the end of the day.

The Dow Jones industrial average finished the day with a loss of 84.31 points, or 0.8 percent, having dropped a much as 121 points earlier in the day. The broader Standard & Poor’s 500-stock index was off 6.89 points, or 0.6 percent. The Nasdaq composite index, full of technology stocks, gave up 15.09 points, or 0.7 percent.

In corporate news, Nike, the world’s biggest shoemaker, said higher sales across the board helped lift its first-quarter profit 32 percent to easily beat Wall Street expectations. Worldwide future orders for products scheduled for delivery through January 2006 grew 11 percent to $4.9 billion, the company added. Nike surged $4.99 to $83.45.

L. Dennis Kozlowski, the former CEO of Tyco International Ltd., and former Tyco finance chief Mark Swartz were sentenced Monday to up to 25 years in prison for stealing hundreds of millions of dollars from the company.

Cruise-ship operator Carnival posted a 12 percent gain in third-quarter profit, as revenue swelled from increased ship capacity and ticket prices. The company also said while the hurricane has depressed results in the latest quarter, recent bookings remain strong and average prices are above the year before. Carnival added $1.75 to $50.78.

Sirius Satellite Radio Inc. raised its projected full-year revenue by $5 million to $230 million, but the expanded forecast still fell short of analyst targets for $234.5 million. The company maintained estimates for 3 million subscribers by year-end, up from about 2.1 million as of last week. Sirius fell 35 cents to $6.70.

Online retailer Overstock.com Inc. sank $2.98 to $39.87 after Stanford Research and Legg Mason downgraded the stock to “hold,” citing concerns that the company’s targeted profitability will be delayed by a year until 2007. Overstock.com said Friday it was completing a technology overhaul that prevented it from posting new products to its Web site for nearly five weeks, but reaffirmed its forecast to break even this year.

On the acquisition front, Norway-based Norsk Hydro ASA said it agreed to buy oil and gas firm Spinnaker Exploration Co. for $2.45 billion in a move to beef up its Gulf Coast operations. And Hewlett-Packard Co. is paying $425 million in cash for Peregrine Systems Inc., a maker of software for managing computer systems. Spinnaker jumped $15.40 to $64.15, and Peregrine gained $6.22 to $25.32.

Overseas, Britain’s FTSE 100 added 0.40 percent, Germany’s DAX index lost 1.21 percent, and France’s CAC-40 was lower by 0.08 percent. The markets in Japan were closed Monday for a holiday.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com