| |
Financial Markets 03/10 09:34
NEW YORK (AP) -- U.S. stocks are drifting lower Tuesday as Wall Street waits
for the next signal on when the war with Iran may end and oil prices could stop
spiking.
The S&P 500 slipped 0.4% in morning trading, a day after its latest wild
swing, this time careening from a sharp early loss to a solid gain by the end
of trading. The Dow Jones Industrial Average was down 250 points, or 0.5%, as
of 10 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Moves were also modest in the oil market, which has been the center of
action for financial markets because of worries about the potential for
long-term disruptions to the energy industry in the Middle East.
The price for a barrel of Brent crude, the international standard, was
sitting at $91.47. That's down 7.6% from its settlement price the day before,
but much of that decline happened before the end of the stock market's trading
day on Monday. A barrel of benchmark U.S. crude was also sitting close to where
it was during the last moments of Monday's trading for U.S. stocks, at $87.49.
Oil prices plunged Monday from a high of nearly $120 per barrel, its most
expensive level since 2022, after President Donald Trump told CBS News he
thinks "the war is very complete, pretty much." That raised hopes that the war
may end sooner than later, which could allow oil to flow freely again from the
Middle East to customers around the world.
But Trump's comments later Monday, after the U.S. stock market finished
trading, were not as clear. And a spokesperson for Iran's paramilitary
Revolutionary Guard said that "Iran will determine when the war ends." Iran
launched new attacks Tuesday at Israel and Gulf Arab countries, keeping
pressure on the Middle East in a war started by Israel and the United States.
That has Wall Street waiting for the next clue about how long the war may
last.
One point where Trump remained clear was his desire to keep the Strait of
Hormuz open. The war has caused blockages in the a narrow waterway off Iran's
coast, where a fifth of the world's oil sails on a typical day. That's been a
central reason for oil prices' extreme swings recently, which have dominated
other financial markets and raised worries about the global economy.
"If Iran does anything that stops the flow of Oil within the Strait of
Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER
than they have been hit thus far," Trump said in a posting on his social media
network late Monday.
"The outlook for oil right now is about as binary as it gets," according to
Hakan Kaya, senior portfolio manager at Neuberger Berman.
"Either the Strait of Hormuz reopens and you see a massive unwind of the
risk premium, or it stays shut and we are looking at the largest supply
disruption in modern history. There is no middle ground, and that is why
putting a number on it is almost irresponsible."
The U.S. stock market has a history of bouncing back relatively quickly from
past military conflicts, as long as oil prices don't stay too high for too
long. Uncertainty about whether that may happen again has led to stunning
swings up and down in markets worldwide, often hour-to-hour.
If oil prices do stay high for long, household budgets already stretched by
high inflation could break under the pressure. Companies would see their own
bills jump for fuel and to stock items on their store shelves or in their data
warehouses.
Stock markets in Asia and Europe jumped in their first chance to react to
Trump's comments from late Monday and the subsequent easing of oil prices.
Indexes leaped 5.3% in South Korea, 2.2% in Hong Kong and 1.5% in France.
Tokyo's Nikkei 225 rose 2.9% after the government released revised economic
data that showed Japan's economy grew faster than initially estimated in the
final quarter of last year, boosted by solid business investments.
In the bond market, the yield on the 10-year Treasury held at 4.12%, where
it was late Monday.
___
AP Business Writers Yuri Kageyama and Matt Ott and AP Videographer Ayaka
McGill contributed.
---------
itemid:f650fe82917ead7099e7cb00572702f6
|
|
