Oil prices surge, stocks fall after US kills Iranian general

Michael Urkonis, Anthony Matesic

FILE – In this Dec. 11, 2019, file photo trader Michael Urkonis, left, and specialist Anthony Matesic work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Friday, Jan. 3, 2020. (AP Photo/Richard Drew, File)

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Stocks fell broadly and oil prices surged after a U.S. strike killed a top Iranian general in Iraq, raising tensions in the Middle East. The selling ended a five-week winning streak for the S&P 500 a day after the index hit its latest record high. The price of oil jumped 3.1%. Bond prices rose as investors sought safety, sending yields lower. That hurt banks, which make less money when interest rates are low. The S&P 500 fell 23 points, or 0.7%, to 3,234. The Dow Jones Industrial Average lost 233 points, or 0.8%, to 28,634. The Nasdaq dropped 71 points, or 0.8%, to 9,020.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks fell broadly on Wall Street and oil prices surgedFriday after a U.S military strike killed a top Iranian general in Iraq.

The killing rattled global markets and knocked U.S. stock indexes off their recent all-time highs. The selling also put the benchmark S&P 500 index on track to snap a five-week winning streak.

Financial stocks were among the biggest decliners as investors bought up U.S. government bonds, sending their yields lower. Technology stocks, health care companies and airlines also took heavy losses.

Several energy stocks rose as the price of U.S. oil headed higher. Defense contractors also notched gains.

Benchmark U.S. crude climbed $1.87, or 3.1%, to settle at $63.05 per barrel. It had been up 3.6% earlier in the day. Brent crude, used to price international oils, rose $2.35, or 3.5%, to close at $68.60 per barrel.

The selling followed a broad decline in markets overseas following news that Gen. Qassem Soleimani, head of Iran’s elite Quds Force, was killed in an air attack at the Baghdad international airport early Friday.

President Donald Trump said the attack was ordered because Soleimani was plotting to kill many Americans. The strike marks a major escalation in the conflict between Washington and Iran, as Iran vowed “harsh retaliation” for the killing of the senior military leader.

The price of gold, which investors buy in times of uncertainty as a safe haven of value, rose$24.70,or 1.6%, to $1,549.20 per ounce.

KEEPING SCORE: The S&P 500 was down 0.6% as of 3:43 p.m. Eastern time. The Dow Jones Industrial Average lost 222 points, or 0.8%, to 28,645. The index briefly dropped 368 points.

The Nasdaq dropped 0.7% and the Russell 2000 index of smaller company stocks gave up 0.4%.

BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 1.79% from 1.88% late Thursday, a big move. Lower bond yields bring down the interest rates that banks charge for mortgages and other consumer loans, making them less profitable. That prompted a sell-off in bank shares. JPMorgan slid 1.1%, Bank of America dropped 2% and Citigroup lost 1.6%.

TURBULENCE: Airlines slumped as oil prices rose. American Airlines Group dropped 4.5%, United Airlines Holdings slid 1.9% and Delta Air Lines lost 1.8%.

BETTING ON DEFENSE: Heightened tensions with Iran helped lift the stocks of defense contractors. Northrop Grumman climbed 5.4% Raytheon rose 1.6% and Lockheed Martin gained 3.5%.

OIL MARKET JITTERS: Energy companies made gains as oil prices surged over concerns that a U.S.-Iran conflict could disrupt global supplies. Occidental Petroleum rose 2.2% and Hess gained 2.6%.

DELIVERING: Tesla shares climbed 3.8% after the electric vehicle maker reported a 50% rise in deliveries for 2019.

COOL MOVE: Lamb Weston vaulted 11.8%, leading all stocks in the S&P 500, after the frozen foods supplier’s fiscal second-quarter earnings and revenue beat Wall Street analysts’ forecasts.

MARKETS OVERSEAS: In Europe, Germany’s DAX tumbled 1.2%, while Italy’s FTSE MIB dropped 0.6%. Both countries are net oil importers with big manufacturing sectors. France’s CAC 40 ended flat, while London’s FTSE gained 0.2%.

In Asia, Hong Kong’s Hang Seng lost 0.3%, while India’s Sensex lost 0.5%. Australia’s S&P-ASX 200 gained 0.6%. Japanese markets were closed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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