Stocks end mixed; oil falls on U.S. pullout from Iran deal
Associated Press
The major U.S. stock indexes partially recovered from a daylong slide in the final minutes of trading Tuesday to finish essentially flat.
The indexes had been drifting slightly lower as investors weighed the Trump administration’s decision to withdraw from a 2015 nuclear deal with Iran and reinstate sanctions on the country.
The policy change, announced in an afternoon speech by President Donald Trump, had been largely expected by traders, who sent crude oil prices sliding more than 2 percent a day after crude reached above $70 a barrel for the first time in more than three years.
Health care, utilities and consumer-goods companies were among the biggest decliners. Banks, technology stocks and industrials posted gains. Energy sector companies also eked out a gain after being in a slump much of the day on lower oil prices.
“At least for the moment the movement in oil is moderate and seems to be more or less what the market was expecting,” said Phil Guarco, global investment specialist, J.P. Morgan Private Bank. “While this is big news, it is not something that the market hadn’t already priced in. Now we have to see what the reactions are.”
The S&P 500 index dipped 0.71 points, or 0.03 percent, to 2,671.92. The lower close snapped a twoday winning streak for the broad market index. The Dow Jones industrial average gained 2.89 points, or 0.01 percent, to 24,360.21. The Nasdaq rose 1.69 points, or 0.02 percent, to 7,266.90.
Smaller companies fared better than the rest of the market. The Russell 2000 index of smallercompany stocks picked up 7.44
points, or 0.5 percent, to 1,586.39.
The major stock indexes spent much of the day in the red and oil prices slumped as investors awaited Mr. Trump’s announcement on the U.S.-Iran policy.
In televised remarks, Mr. Trump said that the United States was withdrawing from the Iran nuclear deal, which he called “defective at its core.” The move reinstalls sanctions on the Iranian regime. The 2015 agreement required Iran to curb its nuclear enrichment program in exchange for relief from international sanctions.
After Mr. Trump’s remarks, oil prices pared some of their earlier losses. Benchmark U.S. crude oil fell $1.67, or 2.4 percent, to $69.06 per barrel in New York. Uncertainty over whether the U.S. would pull out of the Iran pact helped lift the price of crude on Monday above $70 a barrel for the first time since November 2014.
On Tuesday, Brent crude, which is used to price international oils, lost $1.32, or 1.7 percent, to $74.85 per barrel in London.
So why didn’t prices keep climbing Tuesday?
“It’s all really in the expectations,” Mr. Guarco said. “The market was pricing in something even more aggressive. Still, things are very fluid and oil markets could turn on a dime if it seemed that the potential for a supply disruption got meaningfully larger.”
Energy stocks mostly reversed an early tumble. Marathon Oil led the gainers, rising 3.4 percent to $20.44. Several companies, including Airbus, Boeing and Total, that have struck business deals in Iran and could be looking for exemptions from U.S. sanctions, finished slightly lower. Boeing fell 0.6 percent to $338.37, while Total dipped 0.5 percent to $61.67.