| |
Stocks Near Their Records, Oil Rises 08/10 09:39
The U.S. stock market is drifting near its all-time high on Monday, while
oil prices rise on uncertainty about when the Strait of Hormuz could reopen and
get the global flow of crude going again.
NEW YORK (AP) -- The U.S. stock market is drifting near its all-time high on
Monday, while oil prices rise on uncertainty about when the Strait of Hormuz
could reopen and get the global flow of crude going again.
The S&P 500 rose 0.1% after flipping between small gains and losses, coming
off its record set on Friday. The Dow Jones Industrial Average was down 61
points, or 0.1%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was
0.1% higher.
Momentum is slowing for stocks following a rally powered by reports showing
profits soared during the spring for big U.S. companies. Earnings per share for
companies in the S&P 500 are on track to be 50% higher from a year earlier,
according to FactSet. That would be the best growth since five years ago, when
the economy was roaring out of the chasm created by COVID.
Berkshire Hathaway is one of the latest companies to deliver a stronger
profit for the last quarter than analysts expected, and the company built by
legendary investor Warren Buffett said over the weekend that it's also invested
some of its massive pile of cash into stocks under its new CEO, Greg Abel.
Berkshire Hathaway has been famous for buying stocks at what it considers
low prices, and criticism has been high that U.S. stocks generally look too
expensive. But when they report strong profits, it helps them look less pricey.
Berkshire Hathaway's stock rose 2.4%, and its immense size made it one of
the strongest forces lifting the S&P 500 index.
MarineMax jumped 45.9% after the retailer, marina operator and superyacht
services provider said it agreed to sell itself for about $1.5 billion in cash
to a portfolio company of Blackstone.
Varex Imaging leaped 48.3% after Teledyne Technologies said it would buy the
maker of X-ray imaging components for $18.90 per share in cash.
Weighing down on Wall Street was Intel, which fell 4.2% after saying it may
sell $15 billion of its stock. Such a move would dilute the ownership stakes of
existing investors, and Intel said it would likely use the cash for investments
to take advantage of the huge spending underway on artificial-intelligence
technology.
In the oil market, the price for a barrel of Brent crude rose 2.8% to
$85.86. It had swung between $72 and $102 last month as hopes rose and fell
that the United States and Iran could reach an agreement that would allow oil
tankers to freely exit the Middle East again to deliver crude worldwide.
But hopes are turning toward caution again, and the price of Brent is back
to where it was earlier this month, as well as in mid-July, mid-June and in the
first week of the war in March.
Higher oil prices push inflation upward, and the main event for Wall Street
this week will likely be Wednesday's update on how bad inflation was last
month. Economists expect it to show inflation slowed to 3.4% from 3.5% in June.
A slowdown would mean less pressure on the Federal Reserve to raise interest
rates. Higher rates would help keep a lid on inflation, but they would also
slow the economy by making it more expensive for U.S. households and companies
to borrow. They would also undercut prices for stocks and other investments.
A report on Friday showing unexpectedly weak hiring across the United States
lowered Wall Street's expectations for an upcoming hike to interest rates. But
traders still see a 46% chance the Fed will raise its main interest rate at its
next meeting in September, according to data from CME Group.
The yield on the 10-year Treasury rose to 4.68% from 4.65% late Friday.
In stock markets abroad, indexes were mixed in Europe after rising in much
of Asia. Japan's Nikkei 225 jumped 2.1% for one of the world's biggest moves.
___
AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to
this report.
---------
itemid:adb7b918b15206e38d7899d482422308
|
|
