Financial Markets                      11/02 15:22

   

   NEW YORK (AP) -- A morning rally for U.S. stocks petered out on Monday as 
the tech and AI industries remained shaky following their sell-off last week.

   The S&P 500 sank 0.5% after erasing a gain that had reached 1.1% early in 
the day. The Dow Jones Industrial Average rose 213 points, or 0.4%, while the 
Nasdaq composite fell 1.1%.

   The mixed performance for indexes came even though the majority of stocks 
within the S&P 500 climbed. They benefited from a 7.6% drop for the price of a 
barrel of Brent crude to $104.77. It's the latest yo-yo move for oil prices on 
uncertainty about when the war with Iran will allow the global industry to 
return to normal.

   The price for the most actively traded contract in the Brent market has been 
veering between roughly $70 and $120 per barrel since just before the war with 
Iran began, and it's been quick to reverse direction.

   So have stocks in the artificial-intelligence industry, which have been 
shaky for months amid criticism that they surged too high and are in a bubble. 
Worries are growing that all the hundreds of billions of dollars Big Tech 
companies are pouring into AI data centers won't yield enough productivity and 
profit to make the investments worth it.

   The latest profit reports from Alphabet and other Big Tech companies also 
showed how AI may be dragging on their own businesses. Not only did Google's 
parent company burn through more cash during the latest quarter, as measured by 
something called free cash flow, it also reported slower-than-expected growth 
in its search business, which raised worries about AI undercutting its cash 
cow. That caused Alphabet's stock to drop more than 12% Thursday for its worst 
day on record.

   On Monday, Alphabet initially rallied 2.6%, but it later erased the gain and 
then finished with a loss of 0.3%. Nvidia, meanwhile, went from an early gain 
of 2.6% to a drop of 1.3% following its 4.2% slide on Friday. Such swings 
dragged the rest of the market with them.

   Adding to the weakness in tech was Marvell Technology, which fell 12.7% 
after saying it would buy Lumentum. Marvell said it will give 4.5 of its shares 
for each share of Lumentum, which sells lasers and other products that power 
the networks and infrastructure behind AI and cloud computing. Lumentum's 
shares fell 18.6%.

   Outside of AI and tech, the U.S. market did much better, and nearly seven 
out of every 10 stocks in the S&P 500 index rose.

   Monday's ease in oil prices helped lift stocks of companies with big fuel 
bills. United Airlines flew 4.8% higher, Southwest Airlines climbed 3.6% and 
cruise operator Carnival rose 4.2%.

   Marriott International rose 4.3% after reporting strength for its hotels 
around the world. Even in the Middle East, where the war has affected its 
business, CEO Anthony Capuano said that "trends improved meaningfully" from the 
spring.

   Idexx Laboratories leaped 21.8% after it likewise reported stronger profit 
and revenue for the latest quarter than analysts expected. The company, which 
sells diagnostic equipment and other products to veterinarians, also raised its 
forecasts for revenue and profit for the full year of 2026.

   All told, the S&P 500 slipped 38.67 points to 7,541.40. The Dow Jones 
Industrial Average rose 213.67 to 51,983.98, and the Nasdaq composite fell 
272.68 to 25,164.32.

   Expectations are high for all kinds of companies to continue to deliver big 
gains in profits as the U.S. economy keeps chugging along, even with high 
inflation and interest rates. That's what helped send the S&P 500 to its record 
last month.

   A report on Monday said that growth for U.S. manufacturing was better last 
month than economists expected. Perhaps just as importantly, a measure of 
inflation in the survey by the Institute for Supply Management showed prices 
were rising at a slower pace.

   In stock markets abroad, indexes rose in Europe.

   The swings were larger in Asia, where South Korea's Kospi jumped 2.2% on 
renewed strength for the tech giants that dominate its market.

   In China, indexes rose 1.1% in Shanghai and 0.4% in Hong Kong to recover 
some of their steep recent losses. Stocks in Shanghai finished October more 
than 15% below a peak reached in May.

   The People's Bank of China said Monday that around 100 billion yuan ($15 
billion) would be deployed under a new program that could help support the 
market. ___

   AP Business Writers Chan Ho-him and Michelle Chapman contributed to this 
report.

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