Stocks slide as rising dollar hits oil prices

NEW YORK (AP) — A strengthening dollar and worries about an overheated market pounded stocks Monday.

Stock indexes started the day higher but turned sharply lower at midmorning as interest rates rose and a rebound in the value of the dollar stalled a rally in commodities. Early gains in prices for oil and other commodities had pushed up shares of energy and materials companies.

The sharp swings in currency and commodity markets sent the Dow Jones industrial average whipsawing in a 200-point range, surrendering an early advance for a loss of 104 points. Stocks have fallen in four of the last five days.

“This is the tug of war that’s been going on for a while now,” said Samuel Dedio, portfolio manager at Artio Global Investors in New York, referring to sparring between the dollar and stocks.

Oil gave up early gains to slide $1.82 to $78.68 per barrel on the New York Mercantile Exchange. That hurt the shares of major oil companies such as ConocoPhillips.

Changes in the dollar’s value against other currencies like the euro or Japanese yen frequently send commodity prices up or down. Since most commodities are priced in dollars they become more attractive to non-U.S. investors when the dollar is weak, and more expensive when the dollar is strong.

Analysts also said some investors are looking to pocket gains after a stock market run that has stretched nearly eight months and brought share prices to their highest levels in a year last week.

“I’m not sure that you need to have a good reason to see a reversal like this other than too much too fast,” said Harry Rady, chief executive of Rady Asset Management in San Diego, referring to the market’s rise from 12-year lows in early March.

Technology shares fared better than other parts of the market Monday after Marvell Technology Group Ltd., which makes chips used in phone networks, raised its fiscal third-quarter revenue forecast. That helped the technology-focused Nasdaq composite index limit its losses. RadioShack Corp.’s third-quarter sales topped expectations, helping retailers.