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Financial Markets 04/20 15:31
NEW YORK (AP) -- Oil prices climbed Monday following the latest rise of
tensions between the United States and Iran, but the moves were more modest
than they were earlier in the war. U.S. stocks, meanwhile, gave back a bit of
their record-breaking rally.
The S&P 500 slipped 0.2% from its all-time high for just its second drop in
14 days after the United States seized an Iranian-flagged cargo vessel that it
said had tried to evade its blockade of Iranian ports. The Dow Jones Industrial
Average dipped 4 points, or less than 0.1%, and the Nasdaq composite fell 0.3%.
The price for a barrel of Brent crude oil, the international standard,
climbed 5.6% to settle at $95.48 on worries that Iran could keep petroleum pent
up in the Persian Gulf if it continues to block tankers from exiting the Strait
of Hormuz.
It's a turnaround from the prior trading day on Wall Street, when stocks
soared and oil prices tumbled after Iran said Friday it was reopening the
strait to commercial traffic. That enthusiasm vanished quickly after Iran
closed the strait again Saturday following the U.S. decision to press ahead
with its blockade of Iranian ports.
The next big deadline is looming on Tuesday night at 8 p.m. Eastern time,
which is early Wednesday Tehran time, when a ceasefire agreement between the
United States and Iran is scheduled to expire.
Still, oil prices remain well below the high points reached so far in the
war. Brent crude's price briefly got above $119 per barrel when fears were at
their highest. And the S&P 500 is still above where it was before the war.
Monday's relatively muted moves suggest investors still see a possibility of
a U.S.-Iranian agreement that could get oil flowing again from the Middle East
to customers worldwide. It would be in both countries' economic interests to
end the war.
Companies with big fuel bills fell to some of Wall Street's larger losses
following the rise in crude's cost, as they have through much of the war.
Norwegian Cruise Line Holdings dropped 3.5%, and Royal Caribbean Group lost
1.1%.
United Airlines sank 2.8%, and American Airlines fell 4.2% after American
said it's not interested in a merger with United. Airline stocks had flown
higher last week following a report saying United wanted to combine with its
rival.
On the winning side of Wall Street was TopBuild, a distributor of insulation
and building products, which jumped 19.4%. QXO is buying it in a deal valued at
roughly $17 billion.
QXO said the deal would make it the continent's second-largest publicly
traded building products distributor, and its stock fell 3.1%.
All told, the S&P 500 fell 16.92 points to 7,109.14. The Dow Jones
Industrial Average dipped 4.87 to 49,442.56, and the Nasdaq composite slipped
64.09 to 24,404.39.
One big reason the U.S. stock market has been so strong recently is the big
profits that U.S. companies have been reporting for the first three months of
2026, as well as expectations for continued growth.
While reporting stronger profits for the latest quarter than analysts
expected, several of the biggest U.S. banks said last week that they see the
U.S. economy remaining resilient, particularly because of solid spending by
U.S. consumers.
"Despite geopolitical risks, the earnings recovery remains intact,"
according to Morgan Stanley strategists led by Michael Wilson. It's remained so
solid that analysts have even raised their profit expectations since the war
began for the spring of 2026.
Along with JPMorgan Chase, Bank of America and other big banks, about 10% of
companies in the S&P 500 have already reported their results for the start of
2026. Nearly nine out of 10 have delivered a bigger profit than analysts
expected, according to FactSet.
If the rest of the companies in the index match analysts' expectations,
overall earnings per share for S&P 500 companies will end up 13% higher than a
year earlier, according to FactSet.
That's big because stock prices tend to follow the path of corporate profits
over the long term. Other companies scheduled to report their results this week
include UnitedHealth Group on Tuesday, Tesla on Wednesday and Procter & Gamble
on Friday.
In stock markets abroad, indexes fell in Europe following a better finish in
Asia. Germany's DAX lost 1.2%, and Hong Kong's Hang Seng added 0.8% for two of
the world's bigger moves.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this
report.
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