Wall St. falls after Israel's attacks on Iran reduce risk appetite

Wall Street's major indexes dropped on Friday, after Israel hit a number of nuclear facilities and rocket factories in Iran. This escalating tensions shook the oil-rich Middle East. It also undermined global investor confidence.

Israel's attack was to prevent Tehran from developing an atomic bomb, and Iran has threatened harsh retaliation.

The oil prices soared by nearly 7% amid fears that the conflict in the Middle East could disrupt the crude supply. Exxon and Diamondback Energy both rose by 3.2%.

Stocks of airlines fell on concerns that fuel prices could rise if supply bottlenecks were to occur. Delta Air Lines fell by 2.1%, United Airlines dropped 2.6% and American Airlines fell 3.2%.

Defense stocks rose, with Lockheed Martin gaining 3.4%, RTX Corporation gaining 3%, and Northrop Grumman soaring 3.5%.

"I believe the market understands this is a continuation in the war between Iran & Israel... Jed Ellerbroek is the portfolio manager of Argent Capital Management. He said that he doesn't believe the market will expect it to escalate dramatically.

At 11:38 am. The Dow Jones Industrial Average dropped 453.51 points or 1.06% to 42,514.11, while the S&P 500 fell 32.29 points or 0.53% to 6,012.97. Meanwhile, the Nasdaq Composite lost 127.05 or 0.65% to 19,535.43.

Eight of the eleven major S&P sub-sectors declined. Energy stocks rose 1.3% while financials fell 1.5%.

The Dow Jones Industrial Average was set to suffer its first weekly decline in three weeks, while S&P 500 and Nasdaq were on course for their third consecutive week of gains.

Adobe, the Photoshop maker, fell by 5.2% even though it raised its forecast for full-year results.

The majority of megacaps and growth stocks fell. Apple and Nvidia both lost 0.8%.

Visa shares have hit a four-week low, and the last decline was 5.2%.

Boeing shares fell by nearly 2% and weighed on blue-chip Dow.

Gold miners listed in the United States rose as a result of rising bullion prices. Newmont added 2.4% while AngloGold Ashanti gained 3.1%.

The S&P 500 index was 2.1% lower than its record high set earlier this year. This is after impressive gains in May were driven by a combination of positive corporate earnings, a softer stance on trade from President Donald Trump and a stellar month.

The Nasdaq, a tech-heavy stock, is down about 3.2% from its December closing record high.

Investors were calmed by a tame report on consumer prices, data that was softer than expected for producer prices and initial claims of unemployment that remained largely unchanged. The U.S. Federal Reserve is widely expected to maintain interest rates at its meeting next week.

University of Michigan

Surveys

The Consumer Sentiment Index showed that consumer sentiment improved in June for the first six-month period amid trade uncertainty.

On the NYSE, declining issues outnumbered advancing ones by a ratio of 3.27 to 1 and 3.33 to 1 on the Nasdaq.

The S&P 500 recorded nine new 52-week lows and three highs. Meanwhile, the Nasdaq Composite registered 23 new highs with 90 new lows. Reporting by Kanchana Chkravarty in Bengaluru and Sukriti gupta; editing by Devika Syamnath, Pooja Deai

(source: Reuters)