Wall Street closes with a narrowly mixed result, but trading is volatile following air strikes on Iran
U.S. stock prices ended Monday close to flat after a volatile session that saw shares fall early following the weekend's?U.S. Israeli air strikes against?Iran.?But there were bounces all day long as investors bought dips.
The coordinated U.S.-Israeli strikes against Iran last weekend resulted in the death of Tehran's Supreme leader, and shocked global markets. Oil prices rose and many overseas stock indexes ended lower.
Investors in the United States who were looking for bargains bought at the dips following the initial sell-off. They did so because they believed that disruptions caused by the conflict would be limited.
Bill Smead is the founder and chairman of Smead Capital Management. He said, "Market participants believe that this is just a temporary situation and the problems in oil patch will disappear."
The preliminary data shows that the S&P 500 rose 0.54 points or 0.01% to?6,879.42, and the Nasdaq Composite rose 72.40 or 0.32% to 22,740.61. The Dow Jones Industrial Average dropped 86.89, or 0.18% to 48,891.03.
Initial reactions to the conflict were a boost for energy and defense stocks, and a pressure on travel and other interest-sensitive industries. Investors then turned to technology and weighed the impact of the Middle?East war on inflation and Federal Reserve policy.
Smead stated that investors are returning to high-performing, familiar stocks such as Nvidia, Magnificent Seven Technology Stocks and the defense sector.
He said that when people are scared they return to their comfort zone.
Stock markets in Europe and Asia fell under the pressure of high oil prices and war-related uncertainty.
French and German stocks fell by more than 1%. Japan's Nikkei fell 1.73% after falling as much as 2 % at the opening.
Travel and airline stocks fell due to flight cancellations, increased jet-fuel prices and Middle East airspace closures.
A number of oil and gas production facilities in the Middle East have stopped. U.S. crude oil prices ended up 6% higher at $71.23 per barrel, after having risen twice as much in the session.
Defense stocks were also boosted, with the Dow Jones U.S. Defense Index - the main U.S. equity defense benchmark - trading higher.
President Donald Trump told CNN that the "big waves" are yet to come. However, some Middle Eastern nations were lobbying U.S. Allies to convince a rapid?end to this war.
AES Corp dropped after a consortium led BlackRock's Global Infrastructure Partners and equity firm EQT AB decided to buy the utilities company at a discounted price of $33.4 billion.
(source: Reuters)
