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Stocks Recover Losses; Oil Prices Ease 07/09 15:40
Stocks rose, and oil prices eased Thursday as financial markets calmed in
the wait to see what will come next after President Donald Trump raised doubts
about the temporary truce in the war with Iran.
NEW YORK (AP) -- Stocks rose, and oil prices eased Thursday as financial
markets calmed in the wait to see what will come next after President Donald
Trump raised doubts about the temporary truce in the war with Iran.
The S&P 500 climbed 0.8% and more than recovered its loss from the day
before, even though the United States launched new airstrikes against Iran,
which responded by targeting U.S. allies in the Middle East. The Dow Jones
Industrial Average added 139 points, or 0.3%, and the Nasdaq composite rallied
1.3%.
In the oil market, prices gave back much of their jumps from the day before.
The price for a barrel of Brent crude, the international standard, fell 2.2% to
$76.30. That's down from $78.02 the day before though still above its $71.80
price from the end of last week.
The worry is that a return to full-blown war will block oil tankers from the
Strait of Hormuz and prevent the delivery of crude from the Persian Gulf to
customers worldwide. That could worsen inflation, which economists expected
would ease with oil prices, and in turn force the Federal Reserve and other
central banks to raise interest rates.
Higher rates can keep a lid on inflation, but they also slow the economy and
hurt prices for all kinds of investments.
But Trump also said Wednesday that the latest back-and-forth fighting would
not result in "long-term" military action, raising uncertainty about just what
will happen.
The swings for oil prices halted what had been a steady decline in gasoline
prices, and the cost for a gallon climbed a nickel overnight, according to
motor club AAA. The average price for a gallon of regular gasoline was $3.85
Thursday, up 68 cents from a year earlier.
In the meantime, renewed strength for makers of computer chips and other
winners of the boom around artificial-intelligence technology helped to support
stock markets worldwide.
In South Korea, whose stock market is dominated by two companies that make
semiconductors, the Kospi index rose 0.6% after tumbling 5.3% the day before.
SK Hynix, which is preparing to sell shares of its stock that will trade in the
United States, jumped 5.3% in Seoul.
On Wall Street, Micron Technology's climb of 4.5% was one of the strongest
forces lifting the S&P 500. Micron cited "surging demand for memory in the AI
era" as it gave a progress update on construction in central New York of what
it says is the largest semiconductor manufacturing site in U.S. history.
Such stocks have become some of Wall Street's most influential after growing
so big in the euphoria around AI. But AI stocks have also come under pressure
recently because of worries their prices shot too high and that AI may not
create enough productivity and profits to make all the investments in chips and
data centers worth it.
All told, the S&P 500 rose 60.93 points to 7,543.64. The Dow Jones
Industrial Average climbed 139.02 to 52,487.41, and the Nasdaq composite rose
336.24 to 26,206.89.
Stocks broadly got some help from falling yields in the bond market. The
yield on the 10-year Treasury fell to 4.54% from 4.56% late Wednesday.
It had been climbing on worries about high oil prices and the potential for
higher interest rates, which cranked up the pressure on stocks and prices for
other investments.
Besides the war with Iran, another big event for Wall Street is the upcoming
start of earnings reporting season for companies. Next week, the biggest banks
are set to unveil how much profit they made from April through June. Companies
across industries will need to report strong growth to justify the big moves
their stock prices have made.
PepsiCo fell 3.3% even though it reported slightly better revenue for the
latest quarter than analysts expected. Numbers released by the company behind
Gatorade and Doritos showed weakening trends in its North American food and
drinks businesses.
In stock markets abroad, indexes rose across much of Europe and Asia.
Besides Seoul's climb, stock indexes rose 1.7% in Shanghai and 0.9% in Paris.
On the losing end was Hong Kong's Hang Seng, which slipped 0.7% as shares of
Apple supplier Luxshare fell 1.5% in its trading debut.
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