| |
Oil, Stock Prices Keep Swinging 05/18 15:37
Oil prices and stock markets worldwide swung through a shaky Monday with
uncertainty about what will happen with the Iran war.
NEW YORK (AP) -- Oil prices and stock markets worldwide swung through a
shaky Monday with uncertainty about what will happen with the Iran war.
The S&P 500 swiveled between gains and losses before finishing with a dip of
0.1%, its second loss since setting an all-time high last week. The Dow Jones
Industrial Average added 159 points, or 0.3%, and the Nasdaq composite fell
0.5% after both indexes likewise yo-yoed.
Stock prices moved in the opposite direction of oil prices, which have been
twitchy because of uncertainty about how long the Iran war will keep the Strait
of Hormuz closed and prevent oil tankers from delivering crude. The price for a
barrel of Brent crude oil, the international standard, went from a high of $112
overnight to below $107 in the morning before turning back higher.
After settling at $112.10 per barrel, Brent's price then fell back below
$109 after President Donald Trump said late in the day that he would hold off
on a military attack on Iran planned for Tuesday, at the request of allies in
the region. That kept alive hopes that a deal to open the Strait of Hormuz may
still be possible.
The moves for oil prices have helped make the world's bond markets the
center of the action recently. Climbing yields there have cranked up the
pressure on economies and stock markets worldwide.
Higher yields make it more expensive for households and businesses to
borrow, which U.S. homebuyers know because of higher mortgage rates. Higher
interest rates could also make it more difficult for companies to borrow to
build data centers for artificial-intelligence technology, which has been
driving much of the U.S. economy's growth.
In the bond market, the yield on the 10-year Treasury got as high as 4.63%
before falling back to 4.59%, where it was late Friday. The yield on the
10-year Japanese government bond rallied toward its highest level since the
late 1990s.
Yields worldwide have been climbing on fears about higher inflation caused
by higher oil prices, which could push central banks not only to abandon the
possibility of cutting interest rates but also consider hiking rates. Higher
rates would slow inflation at the cost of hurting the economy and dragging on
prices for stocks and other investments.
Several solid reports on the U.S. economy recently, along with worries about
the U.S. government's huge and growing debt problem, are also pushing upward on
yields.
On Wall Street, Regeneron Pharmaceuticals dropped 9.8% to help lead the U.S.
stock market lower after reporting discouraging data from a trial of a
treatment for melanoma.
NextEra Energy fell 4.6% after agreeing to buy Dominion Energy in an
all-stock deal to create the world's largest regulated electric utility by
market value. Dominion rallied 9.4%.
Delta Air Lines finished essentially flat after swinging up and down through
the day because of oil prices. It got a boost early following news that
Berkshire Hathaway bought more than $2.6 billion of the airline's stock.
Berkshire Hathaway built a reputation as a value investor able to buy stocks at
low prices under its former leader, Warren Buffett.
Boston Scientific was another winner and climbed 6.2% after saying it would
spend $2 billion of its previously announced $5 billion stock buyback program
by the end of June. Such purchases send cash directly to investors and boost
the company's per-share earnings.
All told, the S&P 500 fell 5.45 points to 7,403.05. The Dow Jones Industrial
Average added 159.95 to 49,686.12, and the Nasdaq composite fell 134.41 to
26,090.73.
This upcoming week will offer little in terms of data on the U.S. economy,
but a heavily anticipated report on Nvidia's latest quarterly results will
arrive Wednesday. The chip company has routinely blown past analysts'
expectations each quarter, while forecasting even bigger growth than Wall
Street had thought. It will likely need to keep up such momentum to keep AI
stocks driving the market to more records.
Target, Home Depot and Walmart will also report their latest quarterly
results this week.
In stock markets abroad, indexes fell in much of Asia but reversed losses in
Europe to finish higher. Japan's Nikkei 225 sank 1%, but Germany's DAX returned
1.5% for two of the world's bigger moves.
|
|
