Where will Oil Go?

Another day, another swoon for oil. It seems that the price of a barrel of crude, which had soared to within striking distance of $80 over the summmer, is now headed down to $50, or less. Indeed, after yesterday's drop to just over $54 a barrel, crude was passing hands just moments ago at $53.55. In response, the Organization of Petroleum Exporting Countries, or OPEC, will be meeting to address the decline in prices.

Falling oil prices should be a distinct positive for Wall Street. Yet, the stock market is barely managing to edge forward these days, and only late rallies are enabling equities to end some sessions in the black. Yesterday was a prime example, as a late positve reversal allowed the Dow to finish ahead by 26 points. The S&P 500 Index, meantime, gained three points, while the NASDAQ, buoyed by a gain in Apple shares, rose 16 points, to pace the advance.

The news background also was positive, with Alcoa reporting better-than-expected earnings. (The aluminum maker was the first of the 30 Dow components to post quarterly net figures.) Also, the nation's trade imbalance edged a bit lower, thanks to falling oil imports.

Nevetheless, the bulls remain cautious. Perhaps it is the likelhood that the Federal Reserve will now wait a while before lowering rates that's tempering their optimism. On the other hand, it could be lingering worries about the economy and corporate earnings that are failing to ignite the bulls. But then again, it may just be that Wall Street needs to digest six months of steady gains in equity prices before moving higher again in earnest.

Whatever the reason, the stock market seems set to open today's session on a lower note once again when trading commences in about an hour from now.