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Financial Markets 04/20 09:26
NEW YORK (AP) -- Oil prices are climbing Monday following the latest rise of
tensions between the United States and Iran, but the moves are more modest than
they were earlier in their war. U.S. stocks, meanwhile, are giving back only a
bit of their record-breaking rally.
The S&P 500 edged down just 0.1% from its all-time high after the United
States attacked and seized an Iranian-flagged cargo vessel over the weekend
that it said had tried to evade its blockade of Iranian ports. The Dow Jones
Industrial Average was up 2 points, or less than 0.1%, as of 10 a.m. Eastern
time, and the Nasdaq composite was 0.2% lower.
The price for a barrel of Brent crude oil, the international standard,
climbed 3.5% to $93.51 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 last trading day on Wall Street, when stocks
soared and oil prices tumbled Friday after Iran said 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.
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 5.4%, and Carnival lost 1.5%.
United Airlines slipped 1.6%, and American Airlines fell 4.4% 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.
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.
The 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.
Another big reason for the U.S. stock market's strength 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 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 for the spring
of 2026 since the war began.
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 just 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 big companies scheduled to report their results this
week include UnitedHealth Group on Tuesday, Tesla on Wednesday and Procter &
Gamble on Friday.
On the winning side of Wall Street was TopBuild, a distributor of insulation
and building products, which jumped 16.3%. 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 7.9%.
In stock markets abroad, indexes fell in Europe following a better finish in
Asia. Germany's DAX lost 1%, 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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