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BUSINESS Saturday 4 January 2020
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Oil prices surge, stocks slip after US kills Iranian general

By ALEX VEIGA the benchmark S&P 500 in-
Associated Press dex's gains for the week.
Stocks fell on Wall Street in KEEPING SCORE: The S&P
afternoon trading Friday 500 was down 0.4% as of
and oil prices surged after 1:11 p.m. Eastern time. The
U.S. forces in Iraq killed a Dow Jones Industrial Aver-
top Iranian general. age lost 160 points, or 0.6%,
Financial stocks were to 28,708. The index briefly
among the biggest declin- dropped 368 points.
ers as investors bought up The Nasdaq dropped 0.4%
U.S. government bonds, and the Russell 2000 index
sending their yields lower. of smaller company stocks
Technology stocks , health gave up 0.2%.
care companies and air- BOND YIELDS: Bond prices
lines also took heavy losses rose. The yield on the 10-
as the market pulled back year Treasury fell to 1.80%
from record highs. from 1.88% late Thursday, a
Several energy stocks big move.
rose as the price of U.S. oil Lower bond yields bring
headed higher. Defense down the interest rates
contractors also notched that banks charge for mort-
gains. gages and other consumer
Benchmark U.S. crude was loans, making them less
up $1.50, or 2.5%, to $62.69 In this Dec. 11, 2019, file photo trader Michael Urkonis, left, and specialist Anthony Matesic work profitable. That prompted
per barrel. It had been on the floor of the New York Stock Exchange. a sell-off in bank shares.
up 3.6% earlier in the day. Associated Press JPMorgan slid 0.7%, Bank
Brent crude, used to price of America dropped 1.6%
international oils, moved Iran's elite Quds Force, was was plotting to kill many leader. and Citigroup lost 1%.
$2.02 higher to $68.27 per killed in an air attack at the Americans. The strike marks The price of gold, which TURBULENCE: Airlines
barrel. Baghdad international air- a major escalation in the investors buy in times of un- slumped as oil prices rose.
The selling followed a broad port early Friday. conflict between Washing- certainty as a safe haven American Airlines Group
decline in markets overseas President Donald Trump ton and Iran, as Iran vowed of value, was up 1.5% at dropped 3.7%, United Air-
following news that Gen. said the attack was or- "harsh retaliation" for the $1,551 per ounce. lines Holdings slid 2% and
Qassem Soleimani, head of dered because Soleimani killing of the senior military The sell-off erased most of Delta Air Lines lost 1.9%.q
Federal Reserve last month saw a declining risk of recession

By CHRISTOPHER RUGABER on Wall Street and oil prices
Associated Press jumped after U.S. forces
WASHINGTON (AP) — The in Iraq killed a top Iranian
Federal Reserve's policy- general.
making committee saw Yet many analysts say high-
much less risk of recession er oil prices could potential-
at its meeting last month, ly benefit the U.S. economy
when it kept interest rates because of the sharp in-
steady after three straight crease in the past decade
cuts and signaled that it ex- in U.S. oil production. High-
pected to keep low rates er oil prices encourage en-
unchanged through this ergy companies to invest
year. in more drilling wells, which
Minutes of the December boosts demand for steel
meeting, released Friday, pipe and other equipment
showed that Fed officials from U.S. factories, and
supported keeping rates creates jobs. Those trends
in a low range of 1.5% to increasingly offset the drag
1.75% to cushion the U.S. on consumer spending ex-
economy from slow glob- erted by higher gas prices.
al growth and the Trump Though the Fed's policy-
administration's trade ten- making committee voted
sions. Officials were also In this Dec. 11, 2019, file photo Federal Reserve Chair Jerome Powell arrives to speak at a news unanimously last month in
concerned that inflation conference after the Federal Open Market Committee meeting in Washington. favor of keeping rates un-
still hadn't reached the Associated Press changed, several members
Fed's target level of 2%. voiced concerns about the
Still, many Fed policymak- the Trump administration U.S. economy was "show- term had fallen noticeably long-term impact of very
ers said at the Dec. 10-11 and Beijing reached a pre- ing resilience" despite the in recent months." low rates.
meeting that the risks of a liminary trade deal, though trade fights and a weak Since last month's meet- Keeping rates so low could
U.S.-China trade war had press reports had already global economy, the min- ing, though, tensions have fuel excessive risk-taking on
diminished along with the suggested that an agree- utes said. A rise in long-term escalated in the Middle Wall Street, a few partici-
probability of a disruptive ment was near. rates also "suggested that East as the United States pants warned, which could
Brexit. The meeting oc- At their meeting last month, the likelihood of a recession has struck Iranian forces in lead to dangerous asset
curred two days before Fed officials noted that the occurring over the medium Iraq. On Friday, stocks sank bubbles. q