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Oil Rises 3%, Stocks Mixed 07/22 09:53
The U.S. stock market is drifting in mixed trading Wednesday, while oil
prices climb another 3% as fighting continues in the war with Iran.
NEW YORK (AP) -- The U.S. stock market is drifting in mixed trading
Wednesday, while oil prices climb another 3% as fighting continues in the war
with Iran.
The S&P 500 was virtually unchanged, coming off its best day in three weeks,
after swinging between modest losses and gains at the start of trading. The Dow
Jones Industrial Average was up 175 points, or 0.3%, as of 10:15 a.m. Eastern
time, and the Nasdaq composite was 0.4% lower.
The majority of stocks in the S&P 500 was rising after more companies
reported strong profits for the spring. Expectations are high generally, and
companies will need to match them after their stock prices already neared
records on anticipation for them.
Philip Morris International rose 3.2% after the seller of Marlboro
cigarettes reported stronger profit and revenue for the latest quarter than
expected. Its shipments of smoke-free products rose 7.5%.
AT&T climbed 3.6% after reporting a stronger profit than analysts expected.
CEO John Stankey also said the telecom is accelerating plans to send roughly
$10 billion to its shareholders this year through the buybacks of its stock.
Super Micro Computer soared 21.4% after the seller of AI servers said it
expects to report stronger profit margins for the latest quarter than it had
earlier forecast. It, though, also said that revenue will likely come in at the
low end of its forecasted range of $11 billion to $12.5 billion.
They helped offset a 7.3% drop for GE Vernova, which reported a weaker
profit for the latest quarter than analysts expected.
Alphabet ticked 0.3% higher ahead of its earnings report, which is scheduled
to arrive after trading ends for the day. Anticipation is high, and not just
because the parent company of Google is one of the largest stocks on Wall
Street. It's also one of the biggest spenders on artificial-intelligence
technology.
Investors are looking for signs that all the billions of dollars going into
processors, computer memory and other building blocks of the AI boom are
producing the kinds of productivity and profits that would make the investments
worth if. If that isn't the case, stocks of chip companies and other AI winners
would look very expensive following their rushes higher.
Such worries have kept AI stocks at the center of Wall Street's swings for
weeks.
Micron Technology swung between a loss of 3.6% and a gain of 0.8% Wednesday
morning. That's after it jumped 14.4% in the first two days of this week to
reclaim nearly all its 13.3% plunge from the week before. It's still up roughly
240% for the year so far.
Stocks broadly also felt pressure from continuing climbs for oil prices,
which raise costs for most businesses and eat at their profits.
The price for a barrel of Brent crude oil, the international standard, rose
3.1% to $93.83. That's up from less than $72 early this month, which is roughly
where it was before the war with Iran. Early Wednesday morning, it briefly
topped $95 per barrel to touch its highest price in nearly six weeks.
Rising oil prices are threatening a reacceleration of inflation, just as
increases for prices were slowing more than economists expected. That in turn
could push the Federal Reserve and other central banks to raise interest rates,
which would slow economies and undercut prices for stocks and other investments.
The yield on the 10-year Treasury rose to 4.65% from 4.63% late Tuesday and
from just 3.97% before the war with Iran began. It's already helped bring
long-term U.S. mortgage rates to their highest levels in nearly a year.
Oil prices have climbed as fighting across the Middle East keeps oil tankers
from using the Strait of Hormuz to exit the Persian Gulf and delivering to
customers. Normally, a fifth of all oil and natural gas traded in peacetime
passes through the narrow strait.
The auto club AAA said Wednesday that the average price for a gallon of
regular gas in the U.S. jumped again overnight to $4.06. That's still below
highs of around $4.56 per gallon in May, but it had been below $3 before the
United States and Israel attacked Iran in late February.
In stock markets abroad, indexes climbed in Europe following a mixed session
in Asia.
London's FTSE 100 rose 1.6%, while Hong Kong's Hang Seng fell 1% for two of
the world's bigger moves.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
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