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World Shares Mixed, Oil Prices Jump 07/14 05:31
Oil prices surged Tuesday as fighting intensified in the Middle East, while
world shares were mixed after markets in Tokyo and Seoul rebounded from early
losses.
BANGKOK (AP) -- Oil prices surged Tuesday as fighting intensified in the
Middle East, while world shares were mixed after markets in Tokyo and Seoul
rebounded from early losses.
The price of Brent crude climbed 4.1% to $86.73 a barrel after soaring
nearly 10% on Monday. U.S. benchmark crude was up 3.1% at $80.55 a barrel.
Oil prices are still below their wartime peak of nearly $120 a barrel, but
uncertainty over the future stability of supplies has deepened as the U.S. and
Iran each assert they control the Strait of Hormuz.
U.S. futures slipped as the U.S. launched more strikes on Iran after
President Donald Trump said Washington was "reinstating" a blockade on Iran in
the strait.
Fighting in the region has kept oil tankers from using the waterway to
deliver crude to customers from the Persian Gulf, driving up fuel prices
worldwide.
In early European trading, Germany's DAX lost 0.6% to 24,967.19, while the
CAC 40 in Paris shed 0.9% to 8,286.35. In Britain, the FTSE 100 gave up 0.6% to
10,431.63.
The future for the S&P 500 was down 0.1% while that for the Dow Jones
Industrial Average fell 0.3%.
In Asian trading, Tokyo's Nikkei 225 rose 0.7% to 67,743.50.
Shares in SoftBank Group Corp., which has huge investments in AI, jumped
3.3% after its chairman, Masayoshi Son, gave a speech at a company event in
Tokyo where he derided the idea that there is a bubble in investments in
capacity for AI.
The Kospi in South Korea climbed 0.7% to 6,856.83.
The Shanghai Composite index gained 1.4% to 3,967.13.
The government reported that China's exports jumped 27% in June from a year
earlier as adoption of artificial intelligence drove strong demand for computer
chips and other technology. China is due to report its economic data for the
last quarter on Wednesday.
Hong Kong's Hang Seng picked up 0.5% to 24,340.73, while in Australia, the
S&P/ASX 200 was unchanged at 8,805.00.
On Wall Street on Monday, the S&P 500 fell 0.8%, coming off its fourth
winning week in the past five. The Dow Jones Industrial Average dropped 0.3%,
and the Nasdaq composite sank 1.6%.
Chip stocks like Micron Technology helped lead the way lower. Micron fell
4.4%, eating into what had been a stellar rise of 243.1% for the year so far.
Worries are rising that stock prices have shot too high and that the demand
may not be sustainable if AI doesn't deliver as much profit and productivity as
expected.
Nvidia fell 3.5%. Because it's the largest stock on Wall Street by value
thanks to the euphoria around AI, it was the single heaviest weight on the S&P
500.
"The market is effectively saying that the profits may be real, but the
durability, margins and valuations are still open to argument," Stephen Innes
of SPI Asset Management said in a commentary.
Attention is turning to profit reports for the spring. On Tuesday alone,
Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo all
are releasing their latest quarterly results.
Analysts are forecasting that companies in the S&P 500 index will deliver
overall growth of 23.6% from a year earlier, according to FactSet. If they are
right, it would be the second straight quarter of growth better than 20%.
Companies across industries will need to deliver strong growth to justify
the big moves their stock prices have made. Indexes are near records despite
their sharp recent swings due to worries around AI stocks.
More costly oil would push inflation higher, potentially leading the Federal
Reserve and other central banks to raise interest rates. Higher rates can keep
a lid on inflation, but they also slow the economy and hurt prices for all
kinds of investments.
In other dealings early Tuesday, the U.S. dollar slipped to 162.23 Japanese
yen from 162.46 yen. The euro rose to $1.1402 from $1.1382.
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