Stock market today: Wall Street declines, oil prices jump on fears of broader Middle East conflict

Jan 12, 2024, 12:37 AM

Wall Street inched lower ahead of the opening bell Friday and oil prices jumped after the U.S. and British militaries bombed Yemen in retaliation for Houthi attacks in the Red Sea that have disrupted international trade.

Futures for the S&P 500 lost 0.3% and futures for the Dow Jones Industrial Average slid 0.5%.

Oil prices climbed as fears that Israel-Palestinian conflict would spill over into a wider conflict in the oil-rich Middle East.

Early Friday, a barrel of benchmark U.S. crude was up $2.41 to $74.43 per barrel, a 3.4% jump. It rose 65 cents to $72.02 on Thursday. Brent crude, the international standard, gained $2.45 to $79.86 per barrel.

Corporate earnings kicked into high gear Friday with a handful of high-profile companies reporting financial results for the final quarter of 2023.

Delta Air Lines shares tumbled 5.8% in premarket, even as the Atlanta-based carrier posted record sales, doubled its profit from a year ago and said it was buying more planes. Investors were spooked by the company’s per-share profit outlook for 2024.

Three of the nation’s biggest banks said Friday that their profits fell last quarter, as JPMorgan Chase, Bank of America and Citigroup deal with the lingering effects of higher interest rates and the industry costs of last year’s banking crisis. JPMorgan shares rose 2.%, Citigroup rose 1.8% while Bank of America and Wells Fargo were down slightly before markets opened.

Elsewhere, at midday in Europe, Germany’s DAX jumped 0.6%, the CAC40 in Paris gained 0.7% and Britain’s FTSE 100 climbed 0.7%.

Tokyo’s Nikkei 225 gained 1.5% to 35,577.11 capping a week of strong gains that have taken it to levels not seen since 1990, when Japan’s asset bubbles were beginning to deflate at the outset of an era of faltering growth.

The yen’s weakness against the U.S. dollar has boosted Japanese exporters like industrial robot maker Fanuc Corp., whose shares rose 2.1% on Friday.

Taiwan’s Taiex declined 0.2% to 17,512.83 on the eve of presidential and legislative elections that will test the self-governed island’s relations both with Beijing and with Washington.

China reported that its exports and imports edged higher in December in a sign that its economic recovery remains uneven, though global demand may be reviving as central banks halt their latest round of inflation-fighting interest rate increases.

Consumer prices fell 0.3% in December, the third consecutive month of declines and a sign of persisting weakness in demand. The producer price index — which measures prices that factories charge wholesalers — fell 2.7% in the 15th straight month that it has fallen.

Some of that growth was fueled by a nearly 64% increase in auto exports in 2023, to 4.1 million passenger cars, the China Association of Automobile Manufacturers reported Thursday.

The Hang Seng in Hong Kong shed early gains, falling 0.4% to 16,244.58. The Shanghai Composite index slipped 0.2% to 2,881.98.

The Kospi in South Korea slipped 0.1% to 2,537.17, while Australia’s S&P/ASX 200 also edged 0.1% lower, to 7,501.40.

India’s Sensex advanced 1.4% and Bangkok’s SET rose 0.4%.

Stocks had been roaring toward record heights on expectations that a cooldown in inflation would convince the Federal Reserve to cut interest rates sharply in 2024, which would boost prices for investments. Thursday morning’s inflation report showed U.S. consumers paid prices that were 3.4% higher overall in December than a year earlier. That’s an acceleration from November’s 3.1% inflation rate and a touch warmer than economists expected.

But trends underneath the surface may have been a bit more encouraging. After stripping out food and fuel prices, which can shift sharply from month to month, the rise in prices from November into December was close to economists’ expectations.

The inflation data sent Treasury yields on a jagged run in the bond market.

The yield on the 10-year Treasury was steady at 3.96% by early Friday. It’s down from more than 5% in October.

In currency dealings, the U.S. dollar was at 144.83 Japanese yen, down from 145.28. The euro inched back to $1.0967 from $1.0971.

On Thursday, Wall Street wobbled after the update on inflation raised questions about when the Federal Reserve could begin the cuts to interest rates that investors crave so much.

The S&P 500 slipped 0.1% and the Dow rose less than 0.1%. The Nasdaq composite edged up by less than 0.1%.

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Stock market today: Wall Street declines, oil prices jump on fears of broader Middle East conflict