Coke, Citi, AIG Rise; Lehman Falls 6.7%; Ford Drops on Rush To Sell to Kerkorian; Energy Shares Slide
Most U.S. stocks fell because of inflation fears, although one beneficiary of a weak dollar -- Coca-Cola Co. -- helped the Dow Jones Industrial Average hold its head above water.</br></br>On top of the long-running worries about gasoline prices, a weakening labor market and the credit crisis, markets are now absorbing the impact of the commodity boom and inflation world-wide. Riots and protests over the cost of rice and fuel have erupted around the globe, most recently in Cameroon and Spain. Federal Reserve Chairman Ben Bernanke warned the surge in oil prices had increased risks of inflation.</br></br>"Oil's a tremendous pressure on [economic] activity generally. That, plus the fact that it's starting to feed into the consumer-price index globally, puts you in the worst-of-all-possible-worlds situation," said a veteran trader at a midsize Wall Street firm. "I mean, we're talking 1972, 1973 here," he added, referring to a prior era of "stagflation."</br></br>Shares of Coke rose 2.15, or 3.9%, to 58.01 after Deutsche Bank raised its rating on the beverage maker to "buy" from "hold," saying the depressed dollar and emerging-market growth will help its exports. The Beijing Olympics likely will help sales in China, the broker added.</br></br>The second-best percentage gainer on the Dow was Citigroup, which rose 66 cents, or 3.4%, to 20.26. American International Group added 79 cents, or 2.4%, to 34.28.