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Financial Markets 05/26 16:54
NEW YORK (AP) -- The U.S. stock market rose to records Tuesday as it caught
up with climbs for others around the world from the day before, when President
Donald Trump said negotiations were "proceeding nicely" with Iran on ending
their war.
The S&P 500 climbed 0.6% after trading resumed following Monday's holiday
and set an all-time high. The Nasdaq composite rallied 1.2% to set its own
record, while the Dow Jones Industrial Average dipped 118 points, or 0.2%, from
its all-time high.
Stock markets in much of the rest of the world pulled back from their gains
the day before, as fighting continued in the region and the U.S. military said
it carried out "self-defense" strikes in southern Iran, including on missile
launch sites and boats placing mines. Markets have rallied in the past on hopes
for a coming end to the war with Iran, only to see the conflict drag on.
The price for a barrel of Brent crude, the international standard, rose 3.5%
to $96.67, but that reclaimed only some of its plunge from Monday. The price
for a barrel of U.S crude oil, meanwhile, fell 2.8% to settle at $93.89.
Oil prices have been at the center of financial markets' action since the
United States and Israel attacked Iran in late February. The ensuing war has
closed the Strait of Hormuz and kept oil tankers pent up in the Persian Gulf
instead of delivering crude to customers worldwide. That in turn has driven up
oil's price and sent a wave of painful inflation around the world.
Hopes for a deal to improve the flow of oil helped lift stocks of companies
with big fuel bills. United Airlines rose 6%, and Norwegian Cruise Line
Holdings steamed 4.9% higher.
Big technology stocks also continued their big runs. Micron Technology's
stock leaped 19.3% to top $895.88 and was the strongest force lifting the S&P
500 after analysts at UBS led by Timothy Arcuri raised their 12-month price
target for the stock to $1,625 from $535.
The analysts are forecasting continued strength in demand for computer
memory, and Micron's stock has already more than tripled so far this year. It's
the latest Big Tech company to top an overall value of $1 trillion and joined
such behemoths as Nvidia, Apple and Microsoft, which have each blown past $3
trillion.
On the losing side of Wall Street was AutoZone, which dropped 9% after
reporting slightly weaker revenue for the latest quarter than analysts
expected. CEO Phil Daniele said performance for the retailer's stores in Brazil
and Mexico was below its plan, though its overall profit topped analysts'
expectations.
All told, the S&P 500 rose 45.65 points to 7,519.12. The Dow Jones
Industrial Average dipped 118.02 to 50,461.68, and the Nasdaq composite climbed
312.21 to 26,656.18.
Lower oil prices helped pull yields down in the U.S. bond market, which
eased the pressure on Wall Street. The yield on the 10-year Treasury fell to
4.49% from 4.56% late Friday.
It's a respite following recent gains for yields in bond markets worldwide,
which threatened to slow economies and undercut prices for stocks and all kinds
of other investments. High yields have already forced the average long-term
U.S. mortgage rate to its most expensive level since last summer, and they
could curtail companies' borrowing to build the artificial-intelligence data
centers that have supported the U.S. economy's growth recently.
Most big U.S. companies have been reporting both profit and revenue for the
start of 2026 above what analysts expected. The strong performances have helped
vault U.S. stocks to records, even with all the uncertainty around oil prices
and the war with Iran.
U.S. households have been feeling discouraged about the economy because of
accelerating inflation, and a report on Tuesday said consumer confidence edged
downward in May, though the number was not as bad as economists expected. It
followed a report on Friday that said sentiment among U.S. consumers hit its
lowest level on record.
In stock markets abroad, many indexes slipped, including a 0.2% dip for
Japan's Nikkei 225 from its all-time high set the day before.
South Korea's Kospi jumped 2.5% as it caught up with other markets following
its closure on Monday for a holiday. London's FTSE 100 added 0.2% even though
British petroleum giant BP fell 4% there. BP ousted its chairman over what it
called serious concerns related to "important governance standards, oversight
and conduct."
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AP Business Writer Elaine Kurtenbach contributed to this report.
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