Stocks keep down before Fed's meeting by Zuzana Zelenakova

There's always much going on on the American stock market with economic situation still not fully balanced. Currently the focus is being put on oil prices, which rose on Monday in consequence to the Saudi Arabian energy conference. The conference held over the weekend did not put minds of investors at ease as it failed to bring encouraging news about the possible threat to the global markets represented by inflation and slow growth. Another reason is off course insufficient production of oil by Saudi Arabia which pledged to raise output and keep the markets well-supplied. Also the upcoming Federal Reserve meeting starting on Tuesday should deal with these issues and its results are eagerly anticipated. "We think the Fed is sort of in a quandary here... if they raise rates, they run the risk of having some negative impact on the economy and if they don't raise rates they run the risk of negatively influencing the dollar. The trend is driving oil up, which is impairing the economy," said Denis Amato, chief investment officer at Ancora Advisors in Cleveland. With energy prices going higher the general trend for the markets was downwards. Dow Jones went down more than 200 points, Citigroup Inc. fell 3.9 percent and Goldman Sachs Group Inc. 2.8 percent. According to Amato problems in financial sector might very well have a serious impact also on other areas of the economy. "You can't have a functioning economy with all the banks under that much pressure," he said. On the other hand, energy companies rose. With investors seeking safety also Asian markets dropped significantly. Tokyo's Nikkei fell average 0.6 percent. The situation in Europe is similar, energy and pharma prices rose together with oil prices. "Investors have overreacted. Stock prices are unrealistically low after last week sell-off sparked by anticipations of interest rate hikes," said Francois Chevalier, strategist at VP Finance in Paris.

related story: http://news.yahoo.com/s/ap/20080623/ap_on_bi_st_ma_re/wall_street;_ylt=Aqe4Q2nfcMunxrrE5YLGbKes0NUE

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

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