Wall Street closes at a record for the first time since end of January
By Isla Binnie
NEW YORK, April 15 (Reuters) - Wall Street’s stock benchmark S&P 500 touched an intraday record high as hopes for a cooling of U.S.-Iran tensions and strong earnings expectations boosted risk appetite on Wednesday, and oil prices fluctuated on news Iran could make allowances for ships around the Strait of Hormuz.
U.S. President Donald Trump said the war he launched with Israel was "close to over," but industry sources said transit through the Strait of Hormuz, a crucial waterway for global oil and gas shipments, is running at a fraction of its usual volume.
A source briefed by Tehran told Reuters Iran could consider allowing ships to sail freely through the Omani side of the strait if a deal was reached to prevent renewed conflict.
On Wall Street, the Dow Jones Industrial Average fell 0.25% to 48,416.28, the S&P 500 rose 0.65%, to 7,012.41 and the Nasdaq Composite rose 1.29%, to 23,942.88.
"Equity markets, especially in the United States, have rallied back pretty aggressively, showing a decent amount of confidence that this is probably over, or close to the end," said David Seif, chief economist for developed markets at Nomura, referring to "the supply disruption that comes from Hormuz being closed."
Trump told ABC News that talks with Iran to end the war would soon resume and reach a deal, telling the world to watch out for an "amazing two days."
In a Fox Business Network interview conducted on Tuesday and broadcast Wednesday, he said, "I view it as very close to over."
Major banks reported rising profits, kicking off an earnings season analysts expect to show growth across the S&P 500.
Bank of America and Morgan Stanley both reported strong first quarters, pushing their shares up 1.2% and 4.6% respectively.
OIL TICKS HIGHER
Oil prices edged up following steep falls during the previous session, as the stranglehold on the Strait of Hormuz countered optimism about peace talks.
Energy consulting firm Gelber & Associates said a small but increasing number of tankers were moving through the strait. The market was "no longer pricing a full-scale outage, but still holding a residual premium as flows recover unevenly rather than snapping back to normal," the analysts said.
U.S. crude settled up 0.01% at $91.29 a barrel, while Brent rose 0.15% to $94.93 per barrel.
The U.S. Energy Information Administration reported a surprisingly large draw on U.S. weekly crude, supporting prices.
DOLLAR FLIP FLOPS
The U.S. dollar alternated between modest gains and losses and was on track for its eighth straight session of declines.
The dollar index, which measures the U.S. currency against six units, shed 0.01% to 98.06.
"Not only are we at the mercy of the headlines over the conflict, but now the focus is going to be on economic growth," said Juan Perez, senior director of trading at Monex US.
TREASURIES SLIP
Continuing caution tied to the Middle East hostilities saw U.S. Treasuries slip, reversing some of their recent gains.
The two-year Treasury yield, which typically moves in step with expectations for the Federal Reserve’s next moves on interest rates, rose 1 basis point to 3.761%. The 10-year yield was up 2.2 basis points to 4.278%.
Disruptions to global energy markets from the Iran war have had more of an effect on European markets than on the United States, which is a net energy exporter, Nomura’s Seif said.
"If you look at what has happened to bond prices in the U.S., Treasuries, versus in Europe, it hasn’t been good for U.S. bond prices but it has been arguably a lot less negative," Seif said.
The yield on benchmark German 10-year Bunds rose 1.5 basis point to 3.045%, from 3.03% late on Tuesday.