Traders work on the floor of the New York Stock Exchange on Tuesday.
Finally, some slightly better financial news has hit the wires after months of sobering reports: Oil prices dropped to a three-month low on Tuesday, which may be due to “the softening market,” as one analyst puts it in this NYT account, but whatever the reason it still means a slight reprieve from weeks of punishing prices. Stock markets had their biggest gains in four months, leading to the usual flurry of economic speculations and explanations (see below).
The New York Times:
While it is difficult to pinpoint the exact causes for daily market moves, some analysts pointed to weather forecasts predicting that the tropical storm hitting the coast of Texas would bypass major drilling platforms and refineries. That would mean no serious disruptions to domestic oil supplies, which some had initially feared.
There is also a broader sense among investors that the slowdown in economic growth will curb fuel demand around the world, pulling prices back to more reasonable levels. Oil prices have fallen about 17 percent in three weeks. Gas prices in the United States have dropped back below $4 a gallon. And the economic downturn has been worse in some countries than financial experts had anticipated.
“There’s no real magic other than the softening economy,” Ric Navy, an analyst at BNP Paribas, said. “You can try to decide whether it’s anything more than that, but that’s in the eye of the beholder.”