Wall Street tumbles as oil prices soar

With oil near US$130 per barrel, many Wall Street watchers feel the Federal Reserve will have limited head room for cutting rates further

US stocks slumped on Tuesday, with the Dow Jones Industrial Average losing nearly 200 points, as crude oil continued to climb while a bigger-than-expected jump in a key inflation measure rattled investors.
With oil near US$130 per barrel, many Wall Street watchers feel the Federal Reserve will have limited head room for cutting rates further.

One Fed official signaled that the central bank may be done with cutting rates. Oil surged to a new record of US$129.60 a barrel, buoyed by bullish calls by brokerages, weakness in the dollar and supply concerns. Consumer-related stocks were among the worst decliners early on.

US light crude oil for June delivery rose US$2.02 to settle at a record US$129.07 in New York. Some experts said the contract's imminent expiration sparked volatility.....

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Wednesday morning brings earnings from a few retailers and the release of the weekly oil inventories report. The minutes from the last Federal Reserve meeting are due for release Wednesday afternoon.