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Stocks Slip, Oil Prices Rise on Ceasefi04/09 10:11
Oil prices are climbing back toward $100 per barrel on Thursday, while stock
markets worldwide slow following their big gains from the day before.
NEW YORK (AP) -- Oil prices are climbing back toward $100 per barrel on
Thursday, while stock markets worldwide slow following their big gains from the
day before.
The S&P 500 slipped 0.1% as the United States, Iran and Israel disagreed on
the details of their two-week ceasefire, whose announcement had sent markets
flying in optimism on Wednesday. The Dow Jones Industrial Average was down 40
points, or 0.1%, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.2%
lower.
The oil market was jumpier, and the price for a barrel of benchmark U.S.
crude oil climbed 6.8% to $100.79. It rose after semiofficial news agencies in
Iran suggested forces have mined the Strait of Hormuz, the narrow waterway that
has been at the center of President Donald Trump's demands of Iran. Blockages
there have kept oil and natural gas stuck in the Persian Gulf, away from
customers worldwide.
Brent crude, the international standard, rose 3.7% to $98.24 per barrel.
It's well below the $119 level that it briefly reached when worries about the
war reached their height, but it's still well above its roughly $70 level from
before the war.
Given how far apart the United States and Iran seem to be in their demands,
upward pressure on oil prices may be "here to stay for a while" according to
strategists at Macquarie led by Thierry Wizman. Risks remain for renewed
fighting, which could cause customers worldwide to hoard whatever oil supplies
they do get. That could itself keep oil off the market, much like actual
fighting targeting pipelines or oil tankers.
On Wall Street, Simply Good Foods tumbled 15.1% after the company behind the
Quest and Atkins brands reported a worse drop in revenue than analysts
expected. CEO Joe Scalzo called the results unsatisfactory and said the company
is making immediate changes to turn around its performance.
Constellation Brands rallied 5.3% for one of the market's bigger gains after
reporting stronger results for the latest quarter than analysts expected. The
company, which sells Modelo beer and Robert Mondavi wines, said it saw
encouraging trends heading into its new fiscal year. But given "limited
near-term visibility," it pulled its financial forecasts for the following
fiscal year.
A suite of mixed reports on the U.S. economy also helped to keep Wall Street
in check. One said an underlying measure of inflation that the Federal Reserve
considers important was slightly hotter in February than economists expected.
It decelerated before the war with Iran began, but not by as much as economists
expected.
A separate report said that more U.S. workers applied for unemployment
benefits last week than economists expected. The number was not very high
compared with history, but it could indicate an acceleration in layoffs.
Treasury yields swiveled up and down in the bond market following the
reports before ticking higher.
The yield on the 10-year Treasury rose to 4.31% from 4.29% late Wednesday.
Its leap from 3.97% before the war began has sent rates up for mortgages and
other kinds of loans going to U.S. households and businesses.
If oil prices stay high and keep upward pressure on inflation, the Federal
Reserve would have difficulty resuming its cuts to interest rates to help the
slowing economy, even if the job market weakens. A growing number of Fed
officials seem to be considering the possibility of a hike in rates, according
to minutes of their latest meeting released on Wednesday.
In stock markets abroad, South Korea's Kospi fell 1.6%, and Germany's DAX
lost 1.4% for two of the world's biggest moves.
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