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Financial Markets 10/28 15:36
NEW YORK (AP) -- U.S. stocks are rising as gains for Big Tech make up for
slides in oil-and-gas stocks after the price of crude tumbled sharply. The S&P
500 rose 0.3% Monday. The Dow Jones Industrial Average gained 0.6%, and the
Nasdaq composite rose 0.3% to approach its all-time high set in July. Apple and
other Big Tech stocks rose ahead of their profit reports that are scheduled to
come later in the week. Oil prices tumbled more than 6% after an Israeli
retaliation against Iran for earlier missile attacks proved to be more
restrained than some investors had feared.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.
NEW YORK (AP) -- U.S. stocks are approaching records Monday ahead of a big
week for profit reports from Big Tech stocks. Oil prices, meanwhile, are
tumbling toward their worst loss in more than a year.
The S&P 500 was 0.4% higher in afternoon trading. The main measure of the
U.S. stock market is coming off its first losing week in the last seven, but
it's still near its all-time high set earlier this month.
The Dow Jones Industrial Average was up 293 points, or 0.7%, as of 2:36 p.m.
Eastern time, while the Nasdaq composite was 0.4% higher and flirting with its
own record set in July.
Several Big Tech stocks helped lead the way, and five of the behemoths known
as the "Magnificent Seven" are on this week's schedule to report their latest
profits. These high-flying stocks have been at the forefront of Wall Street for
years and have grown so big that their movements can singlehandedly shift the
S&P 500.
After suffering a summertime swoon on worries that their stock prices had
risen too quickly when compared with their profits, Alphabet, Meta Platforms,
Microsoft, Apple and Amazon are under pressure to deliver more big growth.
Another member of the Magnificent Seven, Tesla, soared to one of the best
days in its history last week after reporting a better profit than analysts
expected.
Monday's gains for Big Tech helped offset drops for stocks in the
oil-and-gas industry, which were hurt by the sinking price of oil. Exxon
Mobil's 0.6% drop and ConocoPhillips' slide of 1.5% were two of the heaviest
weights on the S&P 500.
A barrel of benchmark U.S. crude fell 6.1%, and Brent crude, the
international standard, slid 5.9%. It was the first trading for them since
Israel attacked Iranian military targets on Saturday, in retaliation for an
earlier barrage of ballistic missiles. Israel's attack was more restrained than
some investors had feared it could be, and it raised hopes that a worst-case
scenario may be avoided.
Beyond the violence that is taking a human toll, the worry in financial
markets is that an escalating war in the Middle East could cut off the flow of
crude from Iran, which is a major oil producer. Such worries had sent the price
of Brent crude up to nearly $81 per barrel in early October, despite signals
that plenty of oil is available for the global economy. It's since fallen back
below $72.
Financial markets are also dealing with the volatility that typically
surrounds a U.S. presidential election, with Election Day fast approaching in
two Tuesdays. Markets have historically been shaky heading into an election,
only to calm afterward regardless of which party wins.
The trend affects both the stock and the bond markets. In the bond market,
Treasury yields were ticking higher to tack more gains onto their sharp rise
for the month so far.
The yield on the 10-year Treasury rose to 4.29% from 4.24% late Friday.
That's well above the roughly 3.70% level where it was near the start of
October.
Yields have climbed as report after report has shown the U.S. economy
remains stronger than expected. That's good news for Wall Street, because it
bolsters hopes the economy can escape from the worst inflation in generations
without the painful recession that many had worried was inevitable.
But it's also forcing traders to ratchet back forecasts for how deeply the
Federal Reserve will cut interest rates, now that it's just as focused on
keeping the economy humming as getting inflation lower. With bets diminishing
on how much the Fed will ultimately cut rates, Treasury yields have also been
given back some of their earlier declines.
That means the U.S. jobs report on the schedule for Friday could end up
being the market's main event, even bigger than the Big Tech profit reports.
Investors want to see more evidence of solid hiring to keep alive the
perfect-landing hopes for the economy.
Such data has supplanted inflation reports, which used to be the most
important for Wall Street every month but have waned as inflation seems to be
heading toward the Fed's target of 2%.
Yields have also climbed as investors have seen former President Donald
Trump's chances of re-election improving. Economists say a Trump win could help
push inflation higher in the long term, and worsening inflation could push the
Fed to hike interest rates.
Trump Media & Technology Group, the company that tends to move more with
Trump's re-election odds than on its own profit prospects, jumped 18.9% Monday
to $46.27. The parent company of Trump's Truth Social platform has been
rallying since hitting a bottom of roughly $12 in late September, though it's
still well below its perch above $60 reached in March.
Robinhood Markets rose 3.3% after it said it would begin allowing some of
its customers to trade contracts based on whether they think either Trump or
Vice President Kamala Harris will win the 2024 election.
Delta Air Lines was another winner and rose 3.1% after suing CrowdStrike,
claiming the cybersecurity company had cut corners and caused a worldwide
technology outage that led to thousands of canceled flight in July.
In stock markets abroad, Japan's Nikkei 225 rose 1.8% as the value of the
Japanese yen sank after Japanese Prime Minister Shigeru Ishiba' s ruling
coalition lost a majority in the 465-seat lower house in a key parliamentary
election Sunday.
Stock indexes were mostly higher across much of the rest of Asia and in
Europe.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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