Oil Makes New High, Markets Make New Low

June 26, 2008 5:20 p.m. EST

New York, NY (AHN) - Stocks sold off across the board on Thursday as oil rallied $5 a barrel. All three major indices shed 3 percent or more to close on their session low.

Oil broke the $140 level briefly; setting a new all time high when the price touched $140.05 a barrel after the president of OPEC said prices may hit $170 by mid-summer. The commodity settled at $139.60 a barrel.

On the flipside, the Dow Jones Industrial Average set a new 52-week low as it dove past the January 2008 low and closed at 11,453, down 358 points or 3 percent.

The S&P 500 closed at 1,283, sliding 39 points, nearly 3 percent as over 90 percent of the index components were down.

All 10 major economic sectors were lower. Financials led the way down 4.4 percent as investors sold off shares of Citigroup (C) after a Goldman Sachs analyst put the bank on their conviction sell list and reduced the stock price target to $16 from $20.

Merrill Lynch (MER) also helped pull down the financials as rumors swirled the broker may need to raise more capital; shares were down $2.41 or 6.8 percent, closing at $33.05.

Big tech names sold off as the Nasdaq 100 dropped more than 4 percent, sending the Nasdaq Composite down 80 points or 3.3 percent.

Research In Motion (RIMM), the main tech laggard, saw its stock shed 13 percent after issuing first quarter earnings that fell a penny short of estimates.

Gold rallied 4 percent, surpassing the $900 a troy ounce level as buyers stepped into the commodity with the U.S. dollar declining Thursday.

In other news, Bank of America (BAC) announced it will cut 7,500 jobs when their acquisition of Countrywide is complete.