As oil prices broke the previous record settlement price of $48.88 set Friday, Wall Street's fears of oil speculation and a slowdown in profits were renewed. A barrel of light crude for November delivery settled at $49.62, up 74 cents, on the New York Mercantile Exchange. Prices reached $49.75 earlier in the session, marking the highest intraday trading level ever recorded.
However, analysts believed that the stock market, which sold off substantially last week as oil climbed, found a bottom to the selling and that investors were adopting a wait-and-see attitude, hoping that a year-end rally was in the works.
"Clearly we've had oil putting a lot of pressure on this market over the past week or so, but given where oil is right now, we would've expected the market to react even more negatively than where it is," said Brian Belski, market strategist at Piper Jaffray. "With productivity and earnings still pretty strong, and inflation tame aside from oil and gas, we think the market still is set up for a positive move in the fourth quarter."
According to preliminary calculations, the Dow Jones industrial average fell 58.70, or 0.6 percent, to 9,988.54. It was the Dow's lowest close since Aug. 17, when it last fell below the 10,000 mark.