Oil powered. The largest US stock indices closed positively on Thursday, lifted by the rising energy stocks and oil prices following reports of two tanker attacks near Iran. Chinese Vice President Liu He said Thursday that Beijing would soon announce more policies to support the growth and financial market liquidity among the rising US trade pressures.
(ticker: LULU) shares rose as investors cheered the company's latest financial results and prospects. Chinese e-commerce giant
Alibaba Group Holding
(BABA) has filed confidential paperwork for a new listing on the Hong Kong stock exchange to raise $ 20 billion. In today's After the Bell we wonder
- how the Iranian tanker attacks can affect the global oil market,
- look at how the stock market has responded to considering cuts historically  and explain why Facebook was kicked out of a key index.
Thoughts down, prizes up
Stocks reversed from their two-day tapestrip to close in black on Thursday. The
Dow Jones Industrial Average
rose 101.94 points, or 0.39%, to 26106.77 while
got 11.80 points, or 0.41% to 2891.64 and
increased 44.41 points, or 0.57% to 7837.13.
The oil prices spiced on Thursday after 2 tankers with refined petroleum products were attacked on the water's edge near Iran. This is not the first such event in the area, where the tension has been high. Four tankers were attacked with explosives in a harbor near United Arab Emirates last month. The United States accused these attacks of Iran and sent flyers and jetfighters there last month, even though Iran has denied any involvement.
The attacks fit Iran's latest pattern to respond to US sanctions, Paul Sheldon chief geopolitical advisor with S & P Global Platts Analytics wrote on Thursday. "Similar events in the coming months would be unattainable as they target US interests and allies, while probably providing credibility to Iran."
Brent crude, the global benchmark, rose 2.23% to $ 61.31, and West Texas oil rose 2.23% to $ 52.28. It's not just about the two tankers. About one-third of all worldwide marine vessels go through the Hormuz area where the attacks occurred. While a direct conflict or closure of the Hormuz flow in the United States remains long shot, some indications that the passage is not safe will pose a higher risk of disruption to the oil supply and increase demand for stocks in the second half of the year.
Investors have taken some of the recent weak economic data as a positive sign, and it could argue that it could increase the chances of a decline in the Federal Reserve at its July meeting. If that happens, it would be the first time decline since the central bank began raising the interest rate in December 2015. How did the market in such previous scenarios?
Not bad. Since 1984, there have been 7 course strikes that occurred after at least one rate increase, wrote LPL strategist Ryan Detrick in a note on Thursday. While the last two cuts in January 2001 and September 2007 were followed by poor performance over the next 12 months, the other 5 cuts solid gains, while the S & P 500 sees a median return of 13.9% one year out. This should give investors some consolation that a potential speed cut may not be as worrying as many think it would be, according to Detrick.
(FB) was removed from the S&P index ESG index for environment, social and governance. The index providers said that among the reasons was the company's misuse of customer data and hacking on 50 million user accounts. The news came one day after reports that Facebook CEO Mark Zuckerberg may have known about the company's dubious privacy practices, potentially encountering the founder's commitment to user privacy. Facebook had a weight of 2.5% in the S & P 500 ESG index, according to the S&P Dow Jones indices, even greater than its 1.9% weight in the S&P 500 at that time.
Nevertheless, the market does not seem to care too much about the news. The Facebook share jumped 1.4% on Thursday to $ 177.47 per share, with shares over 35% this year, while the S & P 500 has risen 15%. The company reported better than expected earnings in the quarter in April. Deutsche Bank analyst Lloyd Walmsley repeated his Facebook Store Purchase Class on Wednesday, predicting that the company could generate billions of advertising revenue from its Watch video offer in the coming years.
The Hot Stock
(AAL) stock rose 6.4% in the end of $ 33.09 after JPMorgan noted that the airline increased its domestic prices by $ 5. Other airlines included
(LUV), up 3.1% and
(HA), up 2.3%, also increased ticket prices recently.
The greatest loser
(MNST) stock fell 5.4% to $ 60.60 on the market close. It is down 6.5% from a week earlier after the company said at a shareholder meeting earlier this month that it expects the results of arbitration with
(KO) be announced by the end of the quarter.
Write to Evie Liu at email@example.com