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Oil climbs while banks slip, leaving stock indexes mixed

Oil climbs while banks slip, leaving stock indexes mixed
The Associated Press

NEW YORK (AP) — U.S. stocks are mixed Wednesday as the price of oil rises to a three-year high as investors focus on tensions in the Middle East, but banks decline along with interest rates. Stocks had rallied a day ago on signs the trade tensions between the U.S. and China were easing. Facebook stock continues to rise as CEO Mark Zuckerberg testifies to Congress about the company’s data privacy scandal.

KEEPING SCORE: The S&P 500 index fell 8 points, or 0.3 percent, to 2,647 as of 2:50 p.m. Eastern time after it surged 1.7 percent Tuesday. The Dow Jones industrial average slid 164 points, or 0.7 percent, to 24,243. The Nasdaq composite lost 6 points, or 0.1 percent, to 7,088. The Russell 2000 index of smaller-company stocks rose 4 points, or 0.3 percent, to 1,548.

FACEBOOK FACES CONGRESS: Facebook rose 1.5 percent to $167.60 as CEO Mark Zuckerberg testified before Congress for a second day. Facebook stock surged during the first part of his testimony Tuesday afternoon and finished the day with a gain of 4.5 percent, its biggest gain in almost two years.

Daniel Ives, head of technology research for GBH Insights, said there are two reasons for Facebook’s rally. One is that Zuckerberg has done well in his testimony, something investors weren’t sure would happen. The other is that Wall Street feels many members of Congress don’t grasp some of the relevant issues and haven’t been very tough on Facebook, so they’re not as worried that the government will crack down on it and other technology companies.

“A lot of the regulators and politicians don’t really understand Facebook and its (business) model, so how can you expect that regulation is going to be a near-term issue?” he said. “The political theater and grandstanding has actually worked to the benefit of Facebook and Zuckerberg rather than to its detriment.”

The stock is still down about 10 percent since the Cambridge Analytica privacy scandal broke in mid-March. Other social media companies have also rallied. Snap, the parent of Snapchat, rose 2.2 percent, to $14.81. Twitter slipped 0.3 percent to $29.44 after a 5.4 percent jump Tuesday.

ENERGY: The price oil of jumped to a three-year high after President Donald Trump tweeted that the U.S. will launch missiles at targets in Syria in response to the recent suspected chemical attack in a rebel-held area that killed at least 40 people. Fighting in the region could restrict oil supplies.

Benchmark U.S. crude climbed 2 percent to $66.82 a barrel in New York. Brent crude, used to price international oils, gained 1.4 percent to $72.06 a barrel in London.

Oil prices jumped more than 3 percent Tuesday as investors got more optimistic about a possible resolution to the U.S.-China trade spat. If those talks deteriorate and the countries cut back on trade with each other, it could impede global economic growth and reduce demand for oil.

FED MINUTES: Federal Reserve officials at their March meeting are thinking about raising interest rates at a faster pace. While the Fed left interest rates unchanged at the meeting, some policymakers felt the central bank might have to increase rates more quickly in response to faster economic growth and rising inflation, and it might have to focus on slowing the economy to keep inflation under control.

Earlier in the day, the Labor Department said U.S. consumer prices rose in March, and they have climbed 2.1 percent in the last year if food and energy prices are excluded. That could be a sign of rising inflation, a possibility that has worried investors in recent months.

LOSING GROUND: As investors looked for safer investments, real estate investment trusts traded higher and bond prices climbed. The yield on the 10-year Treasury note fell to 2.79 percent from 2.80 percent.

The lower bond yields put pressure on banks. When bond yields fall, it forces interest rates on mortgages and other kinds of loans lower, meaning lower profits for banks.

DEAL DISAPPOINTMENT: Medical and security imaging equipment maker Analogic agreed to be bought by Altaris Capital Partners for $84 a share, or $1.05 billion. That was much less than investors had hoped for and the stock dropped 13.3 percent to $83.30. Analogic spiked from about $84 in March to as much as $96 a share Tuesday. The stock was trading at about $75 a share

Analogic noted that its stock was trading at $67 a share in June, when it said it would consider a sale and other options.

CURRENCIES: The dollar dipped to 106.96 yen from 107.17 yen. The euro fell to $1.237 from $1.2361.

OTHER COMMODITIES: Gold rose 1 percent to $1,360 an ounce. Silver also rose 1 percent to $16.77 an ounce. Copper lost 0.6 percent to $3.12 a pound.

Wholesale gasoline rose 1.3 percent to $2.07 a gallon and heating oil added 1.4 percent to $2.09 a gallon Natural gas edged up 0.7 percent to $2.68 per 1,000 cubic feet.

KEEPING SCORE: Germany’s DAX lost 0.8 percent and the CAC 40 in France dropped 0.6 percent. Britain’s FTSE 100 edged 0.1 percent lower.

Japan’s Nikkei 225 stock index lost 0.5 percent and the Kospi in South Korea declined 0.3 percent. Hong Kong’s Hang Seng climbed 0.6 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay

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