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Oil, markets mix
Stocks set for flat open after attack in Saudi Arabia, OPEC comments push up crude futures.
December 6, 2004: 7:09 AM EST

NEW YORK (CNN/Money) - A rebound in oil prices could put a damper on recent gains in the U.S. stocks Monday.

U.S. stock futures were slightly higher, although lower compared to fair value, which suggests a lower open for major indexes.

The rise in oil and decline in stock futures followed an attack early Monday against the U.S. consulate in Jeddah, Saudi Arabia, which resulted in a number of hostages being taken. But the U.S. embassy reported that all U.S. diplomats were accounted for and there were no American casaulties from the attack.

U.S. crude futures, which fell more than 14 percent last week, advanced 45 cents to $42.99 a barrel in electronic trading, while Brent oil futures gained 31 cents to $39.67 a barrel in London.

In addition to the Saudi attack, comments made ahead of Friday's OPEC meeting could lift oil prices this week. Iran's Oil Minister Bijan Zanganeh said Monday all options, including a cut in production and enforcement of existing quotas will be discussed.

Also putting upward pressure on oil is the takeover of three Nigerian oil production platforms by hundreds of villagers, which cut-off 90,000 barrels a day of exports.

Larry Wachtel, market analyst for Wachovia Securities, said the recent gains in U.S. stocks, coupled with oil prices turning higher, could spark profit-taking by investors, driving markets lower Monday. But he doesn't expect a large move in the market.

"You have to deal with the market itself, which has outperformed. It's reached objectives no one thought would be a obtainable," said Wachtel. "On a day to day basis it's hard to conjure up a catalyst."

Major Asian markets finished mixed as rising oil prices were partly offset by a slight gain in the dollar against both euro and the yen. Major European markets were lower in early trading.

U.S. stocks ended a strong week with modest gains in Friday trading.

Bond prices slipped a bit after the strong rally Friday that followed the weaker than expected November jobs report. The yield on the 10-year bond, which moves in the opposite direction, edged up to 4.26 percent from 4.25 percent late Friday.

In corporate news,Wal-Mart Stores (Research) stuck with its 1 to 3 percent sales growth target for December, even as the world's largest retailer said general merchandise sales weren't robust in the first full week of the holiday shopping period.  Top of page




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