Commodities: Recession fears spark sell-off
Oil prices suffered their biggest one-day drop in 17 years Monday as traders sold commodities amid fears of a recession and on news that US investment bank Bears Stearns almost collapsed.
The Federal Reserve's decision to back JP Morgan's purchase of Bear for just $2 a share and its move to cut its discount rate revealed just how much the central bank fears the credit crisis.
US light crude for April delivery sank $4.53 to close the session at $105.68 a barrel on the New York Mercantile Exchange as investors sought safe havens.
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On the metal markets, gold surged to a new record just shy of $1,034 an ounce Monday, although the bulk of the gains disappeared later in the session.
The April futures contract soared to $1,033.90 in New York, but closed just $3.10 higher at $1,002.60 as part of a wider sell-off in the metals sector.
Elsewhere, copper, palladium and silver all traded lower as traders decided that a global economic slowdown will harm demand for base metals used in industry.
