Crude At $130, But Street Comes Up For Air by Steve Schaefer:
Oil prices kept running higher Wednesday, hitting a record above $130 a barrel. Otherwise, investors were looking to the afternoon release of Federal Reserve minutes from its April 29-30 monetary policy meeting.

Stock market futures plunged when crude hit $130 around 6 a.m. but managed to post modest gains at the open after a slight easing in the energy market.

Crude pulled back to $129.04, up just 6 cents, ahead of the 10:30 a.m. U.S. inventory report. Analysts are expecting another build in crude stockpiles, but there is little reason to expect the data to halt the bull market in oil. (See: "Boone's Boom")

The soaring price of oil continues to weigh heavily on the U.S. consumers and the airline industry. The average gallon of regular gasoline was just shy of $3.81 Tuesday, and AMR (nyse: AMR - news - people ), the parent company of American Airlines, announced several initiatives to counteract record fuel prices.

American said it will reduce its fourth-quarter mainline domestic capacity by 11%-12%, and will retire at least 75 aircraft, among other plans. The airline also introduced a $15 fee for the first checked bag and increased fees for other services. Shares of the carrier were down 25 cents, or 3.1%, to $7.95 in early trading before being halted.

The Dow Jones industrial average gained 5 points, less than 0.1%, to 12,834; the Standard & Poor's 500 added 2 points, or 0.1%, to 1,415; and the Nasdaq tacked on 4 points, or 0.2%, to 2,496.

Time Warner (nyse: TWX - news - people ) revealed the details for the planned separation of Time Warner Cable (nyse: TWC - news - people ). (See: "Cable Cancelled By Time Warner") The cable arm will take on a hefty debt load, via an existing revolving credit facility and a $9 billion, two-year bridge financing from a bank syndicate, to pay a one-time dividend of $10.27 a share, or $10.9 billion, $9.3 billion of which will go to its former parent. Perhaps of most significance is the ability of Time Warner Cable to take on the new debt, at a time when lending markets have been all but frozen. Shares of Time Warner Cable were up 63 cents, or 2.1%, to $30.85, while Time Warner added 37 cents, or 2.3%, to $16.52.

At least one retailer offered a confident outlook Wednesday, a rare occurrence these days, as Talbots (nyse: TLB - news - people ) maintained its 2008 earnings guidance. The women's apparel chain is one of only a few retailers that have not reined in profit forecasts owing to the pressures constraining U.S. consumers, particularly soaring gas prices. Shares of Talbots jumped $1.10, or 14.8%, to $8.54 in early trading.

Meanwhile, office supply retailer Staples (nasdaq: SPLS - news - people ) may have seen its prey wriggle out of its grasp, after Netherlands-based Corporate Express (nyse: CXP - news - people ) announced a deal to acquire privately held Lyreco of France for 1.7 billion euros ($2.7 billion). (See: "Corporate Express Takes A Gamble") The deal was a defensive move by Corporate Express, attempting to fend off Staples' hostile bid. Shares of Staples were down 45 cents, or 1.9%, to $23.16. Back To News

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