Stocks – Middle East Tensions Sink a Wall Street Rally

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Stocks – Middle East Tensions Sink a Wall Street Rally

© Reuters.

Investing.com – What started as a solid stock market rally Friday was mostly wiped out by rising tensions in the Persian Gulf.

The catalyst was a report that Iranian authorities had seized a British tanker passing through the narrow Strait of Hormuz, which connects the Persian Gulf to the Indian Ocean and is a critical passage for global oil supplies.

Crude oil prices surged in New York and London, creating worries enough to pull stocks back. closed at $55.63, up 33 cents, but was trading higher still in the aftermarket.

The finished down 0.6%. The slid 0.7%.

The ended down 0.25%. But the performance was worse than it looks. A 4% gain in shares of Boeing (NYSE:) added nearly 110 points to the blue-chip average by itself. Investors applauded the aerospace giant's decision to take a $5 billion charge to account for costs from the grounding of its 737 Max airliner.

The major averages were down for the week after two weeks of gains. The second-quarter earnings season has started, but many reports failed to impress investors. Even Microsoft (NASDAQ:), which easily beat fiscal-fourth-quarter estimates and guided higher, struggled on the day.

Still, the is up 18.7% on the year. The Nasdaq has gained almost 22.8%. The is up about 16.4%.

The Dow was up as many as 117 points early in the day but gave up 186 points between that level and the close. Only eight of the Dow stocks were higher, with Boeing (NYSE:) the leader. Boeing was also the fifth best performer among S&P 500 stocks.

Microsoft (NASDAQ:), McDonalds (NYSE:) and Visa (NYSE:) hit 52-week highs. So, too, did Adobe Systems Incorporated (NASDAQ:), Cintas (NASDAQ:), Costco Wholesale (NASDAQ:), Ross Stores (NASDAQ:) and {{|sbux}}.

Interest rates attracted some attention as President Trump called on the Federal Reserve to cut its key rates at its July 30-31 meeting, arguing rates have held back the economy this year. The Treasury yield was up slightly on the day to 2.051%. The yield is down 3.5% on the week and 23.8% this year, however.

Traders and investors are just about unanimous the Fed will cut its federal funds rate at this month's meeting. Investing.com's puts the odds at 100%, with a second rate cut coming at its Sept. 18 meeting.

Industrial, energy and materials stocks the strongest sectors on Friday.

Real estate, utilities and communicationsRead More – Source

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