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Financial Markets 04/21 09:26
NEW YORK (AP) -- U.S. stocks are ticking higher Tuesday after UnitedHealth
Group and other big companies showed they're making even bigger profits than
analysts expected. Oil prices, meanwhile, remained relatively stable as
optimism seems to be sticking in financial markets that the United States and
Iran will avoid a worst-case scenario for the economy, even with their war
ongoing.
The S&P 500 added 0.3%, coming off just its second drop in 14 days, and is
close to another all-time high. The Dow Jones Industrial Average was up 309
points, or 0.6%, as of 10:10 a.m. Eastern time, and the Nasdaq composite was
0.4% higher.
UnitedHealth helped lead the market with a jump of 9.4% after reporting
stronger profit and revenue for the beginning of the year than analysts
expected. It also raised its forecast for profit over the full year of 2026.
That's big because stock prices tend to follow the path of corporate profits
over the long term. It's a double-plus for investors when companies not only
top earnings estimates but also forecast even better growth ahead.
Quest Diagnostics rose 5.9% after it likewise joined the fattening list of
companies topping expectations for profit and revenue during the latest
quarter. It also raised its forecast for profit for the full year.
They helped offset an 8.7% drop for Tractor Supply, whose profit and revenue
for the latest quarter fell short of expectations.
Other signals are also indicating the U.S. economy may be doing OK despite
sharp up-and-down swings for oil prices because of the war with Iran. A report
on Tuesday morning showed that U.S. retailers made more money in March, the
first full month of the war, than analysts expected.
Growth was even relatively stable for retail sales when not including those
from gasoline stations.
"It's become cliched to say that the economic hit will depend on the
duration of the Middle East conflict, but that clich does ring true,"
according to Brian Jacobsen, chief economic strategist at Annex Wealth
Management.
The price for a barrel of Brent crude oil, the international standard,
dipped 0.5% to $95.05 ahead of Wednesday's scheduled expiration for a U.S.-Iran
ceasefire agreement. Both sides are continuing to talk tough, but hope remains
after both have signaled they will hold a new round of ceasefire talks in
Pakistan.
Much of the tension in financial markets has focused on what will happen to
the Strait of Hormuz, a narrow waterway off Iran's coast that oil tankers use
to exit the Persian Gulf. A long-term closure would keep crude oil pent up in
the gulf and away from customers worldwide.
The price for a barrel of Brent oil has gone from roughly $70 before the war
to $119 at times as worries have risen and fallen about a long-term closure for
the strait.
On Wall Street, Apple slipped 0.8% after Tim Cook said he'll step down as
CEO on Sept. 1 and become the iPhone maker's executive chairman. He's handing
control over to John Ternus, a company veteran who rose through Apple's
hardware engineering ranks.
Amazon rose 1.9% after Anthropic said it signed a new agreement and is
committing more than $100 billion over the next 10 years to AWS technologies to
train and run its Claude chatbot.
In stock markets abroad, indexes were mixed in Europe following a stronger
finish in Asia. South Korea's Kospi rose 2.7% for one of the world's biggest
moves.
In the bond market, Treasury yields edged higher. The yield on the 10-year
Treasury rose to 4.27% from 4.26% late Monday.
Kevin Warsh, President Donald Trump's nominee to chair the Federal Reserve,
will be speaking on Capitol Hill later Tuesday. He'll face a tightrope walk, as
investors want to see if he would maintain the Fed's independence from
political meddling even though Trump has been pushing hard for lower interest
rates.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this
report.
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