They're like evil twins scaring the stock market.
High oil prices and the credit crunch. The stock market will have to put one or both aside in order to move ahead.
But what might help it in Thursday's market is the foaming, $46.3 billion unsolicited bid for Anheuser-Busch from Belgian brewer InBev, a bid Bud looks poised to resist. Bud stock popped on the after hours news, but it had started moving up in the 3 p.m. hour after CNBC's David Faber reported an offer was getting close.
"Corporate America is on sale. $46 billion sounds like a lot but $30 billion odd euros is a lot cheaper. I think the big story is the weakness of the dollar," said Vince Farrell, managing partner with Scotsman Capital and a CNBC contributor.
Farrell said the Bud bid could help the market shake off some of its worry Thursday, but only if oil prices simmer down. Thomson Reuters says the Bud proposal is the largest announced U.S. takeover offer in 2008 and would be the second largest global deal of the year. The deal would also be the third largest foreign acquisition of a U.S. company if it takes place.
Ahead of Thursday's open, there is early data that will be telling about the consumer - May's retail sales - at 8:30 a.m. There are also weekly jobless claims at 8:30 a.m.; import/export prices at 8:30 and then business inventories at 10 a.m.
There's more Fed speak in store, too. Philadelphia Fed President Charles Plosser will talk to CNBC senior economic correspondent Steve Liesman on "Squawk Box."
Fear of Financials
The nervousness that gripped financial stocks during the worst days of the credit crisis has been creeping back into the market with Lehman's poor market performance topping the list. The S&P financial sector lost 3.3 percent Wednesday as Wall Street traded on a renewed fear of itself (i.e. its investment banks).
"It's really about Lehman and oil, and if Lehman doesn't bounce, we don't bounce," said stock trader Todd Leone of Cowen. "There's no reason to buy the market," Leone said just before the close. "It's a lot psychological too."
The Dow lost 205 points, or 1.7 percent to 12,083, while the S&P fell 22 or 1.7 percent to 1335. The Nasdaq slumped 54, or 2.2 percent to 2394. Oil meanwhile, spiked $5.07 per barrel or 3.9 percent to $136.38 as the dollar slid 0.64 against the euro and 0.45 against the yen.
Lehman stock was down $3.75, or 13.6 percent to $23.75, well below the secondary offering at $28 Lehman announced earlier in the week. The stock has lost 29.8 percent in the last four sessions, and hit its lowest level since October, 2002.
Lehman continues to have its defenders and detractors. Larry Fink, who heads BlackRock, said his firm bought into the secondary offering, and he does not view Lehman as a Bear Stearns equivalent, as many in the market fear.
Oppenheimer analyst Meredith Whitney said on "Closing Bell" that Lehman is being picked on because its the smallest firm, but that unlike Bear Stearns, it has a real business mix. She said other financial firms could see their stocks decline sharply.