Stock Futures Fall Sharply As Oil Rises

NEW YORK — Stock futures plummeted Thursday as optimism about the Federal Reserve's interest rate cut gave way to worries about surging oil prices and slower growth in consumer spending.

Consumers scaled back their spending in September as worries mounted about a worsening housing market and squeezed credit conditions. The Commerce Department said consumer spending — which accounts for two-thirds of the economy — rose 0.3 percent, below the 0.4 percent growth analysts expected.

Weaker earnings from Exxon Mobil Corp. also dented investor confidence. Exxon Mobil, the world's largest publicly traded oil company and a Dow Jones industrial, posted a $9.41 billion profit in the third quarter, compared with $10.49 billion a year ago, due to lower natural gas prices and weaker margins in its refining and fuels marketing business. Gasoline prices didn't keep up with the gains in crude in the past quarter, which made refining oil more expensive.

Dow Jones industrial average futures tumbled 136.00, or 0.98 percent, to 13,800.00. Standard & Poor's 500 index futures shed 18.70, or 1.20 percent, to 1,536.20. Nasdaq 100 index futures lost 16.50, or 0.73 percent, to 2,236.00.

Treasury bond prices rose. The yield on the 10-year Treasury note fell to 4.45, down from 4.47 percent late Wednesday.

The Dow looked to retreat from a more than 130-point advance Wednesday, when the Federal Reserve lowered its benchmark interest rate by a quarter point to 4.50 percent. Investors had reason to rally: The central bank simultaneously loosened the money supply and suggested that strains on the financial markets — and economy — have eased.

But the Fed's move began a chain reaction that sent oil prices higher. Lower interest rates tend to undercut the dollar, which reached an all-time low against the euro following the Fed's decision. The dollar's tumble drove investors to the commodities market in search of a hedge: Oil prices surged above $96 a barrel in electronic trading overnight, while gold prices topped $800 an ounce.

The concern on Wall Street comes in part because Fed cautioned that higher energy and commodity prices could add to inflation pressures. Rising inflation could prevent the central bank from cutting rates further this year.

Crude oil futures rose 5 cents to $94.58 on the New York Mercantile Exchange. Gold futures lost $2.10 to $793.20 an ounce, as the dollar rebounded from its lows. The euro bought $1.4426 in early trading Thursday, off its $1.4503 peak.

Investors waded through another heavy day of earnings reports and economic news.

The Commerce Department reported that while consumers cut back spending, personal income grew 0.4 percent in September, on par with the August increase. Also Thursday, the Labor Department said the number of people filing for unemployment benefits declined by a larger-than-expected 6,000 last week to total 327,000.

In corporate news, CVS Caremark Corp., the nation's largest pharmacy chain, said earnings more than doubled in the third quarter due to robust sales at stores open at least one year and improved margins. The results topped market expectations.

Sprint Nextel Corp. posted sharply lower third-quarter profit as its wireless customer base shrunk, resulting in weaker revenue. The company is the country's third-largest wireless provider behind rivals AT&T Inc. and Verizon Wireless.

European markets moved sharply lower. Britain's FTSE 100 fell 1.55 percent, Germany's DAX index shed 1.30, and France's CAC-40 declined 1.74 percent. In Asia, Japan's Nikkei stock average rose 0.79 percent, while Hong Kong's Hang Seng index rose 0.45 percent

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