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Wall Street Drifts in Mixed Trade 07/22 15:27
U.S. stock indexes barely budged on Wednesday after oil prices climbed
another 3% as fighting continues in the war with Iran.
NEW YORK (AP) -- U.S. stock indexes barely budged on Wednesday after oil
prices climbed another 3% as fighting continues in the war with Iran.
The S&P 500 edged down by 0.1%, coming off its best day in three weeks. The
Dow Jones Industrial Average dipped 6 points, or less than 0.1%, and the Nasdaq
composite fell 0.6%.
Despite the modest moves for indexes, stocks had some big swings underneath
the surface. Philip Morris International rallied 3.3% after the seller of
Marlboro cigarettes reported stronger profit and revenue for the latest quarter
than expected. Its shipments of smoke-free products rose 7.5%.
AT&T climbed 3.5% after reporting a stronger profit than analysts expected.
CEO John Stankey also said the telecom is accelerating plans to send roughly
$10 billion to its shareholders this year through the buybacks of its stock.
Super Micro Computer soared 19.8% after the seller of AI servers said it
expects to report stronger profit margins for the latest quarter than it had
earlier forecast. It, though, also said that revenue will likely come in at the
low end of its forecasted range of $11 billion to $12.5 billion.
On the losing side of the market was GE Vernova, which fell 8.7% after
reporting a weaker profit for the latest quarter than analysts expected.
Alphabet sank 1.5% ahead of its earnings report, which arrived after trading
ended for the day.
Anticipation was high, and not just because the parent company of Google is
one of the largest stocks on Wall Street. It's also one of the biggest spenders
on artificial-intelligence technology.
Investors are looking for signs that the deluge of dollars going into
processors, computer memory and other building blocks of the AI boom are
producing enough profits to make the investments worth it. If Alphabet and
other "hyperscalers" say that isn't the case, stocks of chip companies and
other AI winners would look very expensive following their monumental moves
higher.
Such worries have kept AI stocks at the center of Wall Street's swings for
weeks, and they helped drag the market up and down Wednesday.
Micron Technology swung between a loss of 3.6% and a gain of 1.2% before
finishing with a drop of 1.2%. That's after it jumped 14.4% in the first two
days of this week to reclaim nearly all its 13.3% plunge from the week before.
It's still up 236% for the year so far.
All told, the S&P 500 fell 10.24 points to 7,498.96. The Dow Jones
Industrial Average dipped 6.06 to 52,218.58, and the Nasdaq composite sank
146.30 to 25,690.90.
Stocks broadly also felt pressure from continuing climbs for oil prices,
which raise costs for most businesses and erode their profits.
The price for a barrel of Brent crude oil, the international standard, rose
3.4% to $94.07 and briefly topped $95 in the morning to touch its highest level
in nearly six weeks. That's up from less than $72 early this month, which is
roughly where it was before the war with Iran.
Rising oil prices are threatening a reacceleration of inflation. That in
turn could push the Federal Reserve and other central banks to raise interest
rates, which would slow economies and undercut prices for stocks and other
investments.
The yield on the 10-year Treasury rose to 4.65% from 4.63% late Tuesday and
from just 3.97% before the war with Iran began. It's already helped bring
long-term U.S. mortgage rates to their highest levels in nearly a year.
Oil prices have climbed as fighting in the Middle East keeps oil tankers
from using the Strait of Hormuz to exit the Persian Gulf. Normally, a fifth of
all oil and natural gas traded passes through the narrow strait.
The auto club AAA said Wednesday that the average price for a gallon of
regular gas in the U.S. jumped again overnight to $4.06. That's still below
highs of around $4.56 per gallon in May, but it had been below $3 before the
United States and Israel attacked Iran in late February.
In stock markets abroad, indexes climbed in Europe following a mixed session
in Asia.
London's FTSE 100 rose 1.2%, while Hong Kong's Hang Seng fell 1% for two of
the world's bigger moves.
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