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Financial Markets 06/09 09:32
NEW YORK (AP) -- The U.S. stock market is ticking higher Tuesday as
artificial-intelligence stocks regain more of their sudden and sharp losses
from last week, while oil prices ease.
The S&P 500 rose 0.2% and pulled back within 2.5% of its all-time high set a
week ago. The Dow Jones Industrial Average was up 195 points, or 0.4%, as of
10:15 a.m. Eastern time, and the Nasdaq composite was close to flat.
Companies selling computer chips, memory and other building blocks of the AI
boom again helped lift the market.
Micron Technology rose 0.7%, for example, a day after jumping 9.9% and two
days after plunging 13.3%. The computer memory company's stock has already
tripled so far this year, raising criticism that it's gone too far, too fast.
Following last week's industrywide sell-off, the question is whether AI stocks
are heading for a long downturn or just needed a shake-out to get rid of
excessive optimism.
The biggest gain in the S&P 500 came from J.M. Smucker, which jumped 11.5%
after reporting a stronger profit for the latest quarter than analysts
expected. The company behind the Folgers, Hostess and other brands benefited
from higher prices charged for coffee and sweet baked goods. It joined the long
list of U.S. companies delivering stronger profit growth than analysts
expected, which has helped drive the S&P 500 to record after record this year.
Nuvalent soared 38.8% after GSK agreed to buy the biotech company for $10.6
billion. The shares of U.K.-based GSK that trade in New York added 0.6%.
Wall Street, meanwhile, got some relief from falling oil prices. The price
for a barrel of Brent crude oil dropped 3.3% to $91.14 after briefly topping
$98 the day before.
Prices have swung up and down as hopes fade and rise that the United States
and Iran can reach a deal to reopen the Strait of Hormuz. That would allow oil
tankers to resume delivering crude from the Persian Gulf to customers.
The drop in oil prices helped stocks of airlines, which have been punished
by soaring fuel costs. U.S. airlines spent more than $6 billion on jet fuel in
April, up 78% from a year earlier, according to government data. United
Airlines rose 3%, and Delta Air Lines climbed 2.8%.
To make up for their higher fuel bills, airlines have been raising their own
airfares. It's part of the broad, painful acceleration of inflation hitting
U.S. shoppers because of the war with Iran. The high oil prices are also
pushing up bond yields worldwide, raising the pressure on stock prices.
Treasury yields eased a bit Tuesday with the fade in oil prices. The yield
on the 10-year Treasury dipped to 4.54% from 4.56% late Monday. But it's still
well above its 3.97% level from just before the war with Iran.
The latest monthly updates on U.S. inflation will arrive later in the week,
with one on consumer prices coming Wednesday and one on wholesale prices coming
Thursday.
Inflation is high enough, and the U.S. job market looks strong enough, that
traders on Wall Street largely expect the Federal Reserve will have to raise
its main interest rate at least once by the end of this year. Higher interest
rates would keep a lid on inflation, but they would also threaten to slow
economies and undercut prices for stocks and all kinds of other investments.
The average long-term U.S. mortgage rate has already recently climbed to its
highest level in nine months, and high costs to borrow money could discourage
the building of AI data centers that are fueling the U.S. economy's growth.
In stock markets abroad, indexes rose in much of Europe following bigger
moves in Asia.
South Korea's Kospi jumped 8.2% and nearly recovered Monday's plunge of
8.3%. It's been beholden to the performance of big tech stocks like SK Hynix
and Samsung Electronics.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this
report.
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