NEW YORK (AP) — The U.S. stock market is hanging just below its records Thursday as oil prices keep dropping on hopes that a deal may be nearing to allow tankers to deliver crude once again from the Persian Gulf to customers.
The price for a barrel of Brent crude oil, the international standard, fell 0.5 per cent to US$100.76, down from more than US$115 early this week. It and gasoline are still much more expensive than they were before the war with Iran began, but hope is rising in financial markets as Iran said it was reviewing the latest U.S. proposals on ending their war.
On Wall Street, the S&P 500 fell 0.3 per cent from its all-time high set the day before after a spokesperson for Pakistan’s Foreign Ministry said, “We expect an agreement sooner rather than later.” Pakistan has been acting as a mediator between the United States and Iran, and the hope is that they will reopen the Strait of Hormuz. Its closure during the war has kept oil tankers trapped in the Persian Gulf and sent prices higher for crude and all kinds of products.
The Dow Jones Industrial Average was down 244 points, or 0.5 per cent, as of 1:14 p.m. Eastern time, and the Nasdaq composite fell 0.1 per cent from its own record.
Of course, Wall Street has rallied strongly before on hopes for a coming end to the war with Iran, only to get quickly disappointed. That could happen again, and tensions are still high in the Middle East after a U.S. fighter jet shot out the rudder of an Iranian oil tanker in the Gulf of Oman Wednesday as it tried to breach the American blockade of Iran’s ports.
Despite all those uncertainties, a powerful parade of U.S. companies saying they made even bigger profits during the first three months of the year than analysts expected has helped support the U.S. stock market. Stock prices tend to follow the path of corporate profits over the long term.
Datadog leaped 25.7 per cent to help lead the U.S. market after the monitoring and security platform for cloud applications topped analysts’ expectations for profit in the latest quarter.
Albemarle rose 6.1 per cent after the lithium products and specialty chemicals company likewise delivered better-than-expected results. Taser maker Axon Enterprise rallied 10.2 per cent after raising its forecast for revenue this year in part because of big growth for its counter-drone products.
They helped offset a 12.5 per cent drop for Whirlpool, which tumbled after reporting much weaker results than analysts expected. It announced the largest price increases in a decade for its major appliances in North America, while accelerating cuts to its costs, as it contends with weaker confidence among U.S. consumers.
Shake Shack dropped 28.4 per cent after its results for the latest quarter fell well below analysts’ expectations.
McDonald’s was mostly unchanged even though its revenue for the latest quarter edged past analysts’ expectations. CEO Chris Kempczinski said high gasoline prices and consumer anxiety over the Iran war could dent its sales this spring.
Stan Choe, The Associated Press. Matt Ott and Elaine Kurtenbach, The Associated Press
