US Stocks Rise After Oil Prices Fall   03/09 15:30

   The U.S. stock market careened through a manic Monday, going from a steep 
early loss to a solid gain as worries turned into hope that the war with Iran 
may not last that long. 

   NEW YORK (AP) -- The U.S. stock market careened through a manic Monday, 
going from a steep early loss to a solid gain as worries turned into hope that 
the war with Iran may not last that long. Oil prices whipped from nearly $120 
per barrel, their highest since 2022, back toward $90.

   The S&P 500 dropped as much as 1.5% in the morning before flipping to a gain 
of 0.8%. The Dow Jones Industrial Average clawed back a plunge of nearly 900 
points to rise 239 points, or 0.5%, while the Nasdaq composite climbed 1.4%.

   They're the latest hour-to-hour swings to pummel financial markets because 
of the uncertainty about just how high oil prices will go and how long they 
will stay there because of disruptions to the energy industry in the Middle 
East. Markets made their remarkable reversals during the last hour of Wall 
Street's trading after President Donald Trump told CBS News that he thinks "the 
war is very complete, pretty much."

   That calmed worries that had built earlier in the morning, when the price 
for a barrel of Brent crude, the international standard, briefly touched 
$119.50. It hadn't been that expensive since the summer of 2022 after Russia 
invaded Ukraine.

   If oil prices stay very high for very long, households' budgets already 
stretched by high inflation could break under the pressure. Companies, 
meanwhile, would see their own bills jump for fuel and to stock items on their 
store shelves or in their data warehouses. It all raises the possibility of a 
worst-case scenario for the global economy, "stagflation," where growth 
stagnates and inflation remains high.

   Concerns have focused in particular on the Strait of Hormuz, a narrow 
waterway off Iran's coast that a fifth of the world's oil sails through on a 
typical day. Iran had earlier threatened to set fire to ships sailing the 
strait.

   If the strait remains closed for only a few weeks, the price of oil could 
push to $150 per barrel of higher, according to oil and gas strategists at 
Macquarie Research.

   But oil prices pared their gains through the day, initially on talk that 
seven of the world's largest economies could coordinate moves to push back on 
the spikes. They then slid sharply after CBS News said Trump said of Iran that 
"if you look, they have nothing left. There's nothing left in a military sense."

   Trump also added that when it comes to the Strait of Hormuz, he's "thinking 
about taking it over," according to CBS.

   A barrel of Brent crude pulled back to settle at $98.96 in the afternoon and 
then kept falling afterward below $90. A barrel of benchmark U.S. crude touched 
$119.48 during the morning, then pulled back to settle at $94.77 and then sank 
toward $85.

   The U.S. stock market has a history of bouncing back relatively quickly from 
past military conflicts, as long as oil prices don't stay too high for too 
long. Some professional investors continue to suggest that drops in prices for 
stocks could ultimately offer opportunities to buy them at cheaper levels 
before they rise again.

   "We continue to believe that the current acute shortage of oil will be 
reversed in the coming months as new supply comes online and oil should drop 
significantly," according to Sameer Samana, head of global equities and real 
assets at Wells Fargo Investment Institute.

   Even with all the recent swings in the market, the S&P 500 index that sits 
at the heart of many 401(k) accounts is still within 3% of its record set in 
January.

   All told, the S&P 500 rose 55.97 points to 6,795.99. The Dow Jones 
Industrial Average added 239.25 to 47,740.80, and the Nasdaq composite gained 
308.27 to 22,695.95.

   To be sure, prices could reverse again in the coming days given all the 
uncertainties about the war. That's what happened through the huge swings that 
rocked Wall Street last week.

   In stock markets abroad, where economies are more dependent on the import of 
oil and natural gas, stocks fell sharply before Trump's comments were 
published. South Korea's Kospi sank 6%, Japan's Nikkei 225 tumbled 5.2% and 
France's CAC 40 dropped 1%.

   Trump's comments came after he said late Sunday that high oil prices at the 
moment were worth the cost.

   "Short term oil prices, which will drop rapidly when the destruction of the 
Iran nuclear threat is over, is a very small price to pay for U.S.A., and 
World, Safety and Peace," he said in a posting on his social media network.

   In the bond market, the yield on the 10-year Treasury fell to 4.10% from 
4.15% late Friday.

   Worries about high inflation and oil prices are pushing upward on Treasury 
yields, and the 10-year yield briefly rose above 4.20% early Monday.

   But worries about a potentially slowing economy are pulling downward at the 
same time. On Friday, a discouragingly weak report on the U.S. job market 
showed that employers cut more jobs last month than they added.

   Yields then slid late in the day when oil prices eased.