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Financial Markets 04/14 09:34
NEW YORK (AP) -- The U.S. stock market is inching closer to its all-time
high on Tuesday, and oil prices are easing as hopes rise that the United States
and Iran may try again on talks to end their war and avoid a worst-case
scenario for the global economy.
The S&P 500 added 0.4% after a rally the day before returned it to where it
was before the United States and Israel launched attacks on Iran in late
February. The index at the heart of many 401(k) accounts is just 1% below its
record and on track for its ninth gain in the last 10 days.
The Dow Jones Industrial Average was up 20 points, or less than 0.1%, as of
9:35 a.m. Eastern time, and the Nasdaq composite was 1% higher.
They followed up on gains for stock markets worldwide as expectations rose
for a possible return to talks by the United States and Iran. Such prospects
also helped lower the price of oil, whose production and transportation has
been snarled by the fighting.
The price for a barrel of Brent crude oil, the international standard, fell
2.1% to $97.31. That's still above its roughly $70 level from before the war,
but it's well below its peak of $119 reached a couple times when worries about
the war hit their heights.
To be sure, hope has often quickly swung into doubt in financial markets
since the war began, which has caused extreme and sudden reversals. Much of the
stress has been due to the Strait of Hormuz, a narrow waterway that's the main
avenue for crude oil produced in the Persian Gulf area to reach customers
worldwide. Blockages there have kept oil off the global market, which has in
turn driven up its price.
And that has meant a blast of higher inflation. In the United States,
inflation at the wholesale level accelerated to 4% in March from 3.4% the month
before, according to the latest data released Tuesday. That was actually better
than the 4.6% rate economists expected, but it could all filter down to U.S.
households if businesses fully pass the increases through.
The effect is worldwide. Global inflation this year looks set to accelerate
to 4.4% this year from 4.1% in 2025, according to the International Monetary
Fund, which had earlier thought inflation would slow to 3.8%.
The IMF on Tuesday also downgraded its forecast for global economic growth
to 3.1% this year from the 3.3% it had forecast in January.
On Wall Street, strong profit reports from several companies and
expectations for more are helping make up for such worries. At their heart,
stock prices tend to follow the path of corporate profits over the long term.
BlackRock gained 2.7%, and Citigroup rose 1.6% after the financial companies
reported stronger profit and revenue for the latest quarter than analysts
expected.
JPMorgan also delivered a better-than-expected quarter, but its stock dipped
1% as CEO Jamie Dimon said bank officials cannot predict how the "increasingly
complex set of risks" will play out given so much uncertainty.
Amazon climbed 2.4% after saying it would buy Globalstar, a mobile satellite
services company, for $90 per share in either cash or Amazon stock. Globalstar
rose 8.6%.
They helped offset a 6.1% drop for Wells Fargo, which reported weaker
revenue for the latest quarter than analysts expected.
In stock markets abroad, indexes rose across much of Europe and Asia. South
Korea's Kospi jumped 2.7%, and Japan's Nikkei 225 rose 2.4% for two of the
bigger gains.
In the bond market, Treasury yields held relatively steady. The yield on the
10-year Treasury edged down to 4.29% from 4.30% late Monday.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
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