Stocks drop on Fed concerns; U.S. oil jumps 8.8 percent
By Caroline Valetkevitch
NEW YORK (Reuters) - World stock indexes fell on Monday as a Federal Reserve official's comments added to investor concerns the bank may start raising interest rates in September, while oil prices jumped more than 8 percent, extending their biggest price surge in 25 years.
The S&P 500 registered its biggest monthly percentage drop since May 2012 after being pummeled in the past two weeks on concerns about slowing growth in China.
U.S. crude oil futures jumped 8.8 percent, helped by a downward revision of U.S. crude production data and OPEC's readiness to talk with other producers.
Fed Vice Chairman Stanley Fischer said in a speech at the annual Jackson Hole, Wyoming, central bankers' symposium over the weekend that U.S. inflation was likely to rebound, allowing rates to rise gradually.
Many analysts took Fischer's comments as a sign the Fed would raise rates in September, instead of December. That shook already jittery stock investors.
"If they move in September, it's going to cast a lot of doubt about where they will stop," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.
The Dow Jones industrial average .DJI fell 114.98 points, or 0.69 percent, to 16,528.03, the S&P 500 .SPX lost 16.69 points, or 0.84 percent, to 1,972.18 and the Nasdaq Composite .IXIC dropped 51.82 points, or 1.07 percent, to 4,776.51.
The Dow, down 6.6 percent for August, registered its worst monthly percentage decline since May 2010. The Nasdaq, off 6.9 percent for August, and the S&P 500, down 6.3 percent, both posted their worst months since May 2012. Continued...