Financial Markets                      07/13 09:29

   

   NEW YORK (AP) -- Oil prices are climbing Monday following a weekend of 
attacks in the Middle East, while more losses for computer chipmakers and other 
winners of the artificial-intelligence boom weigh on stock markets.

   The price for a barrel of Brent crude oil, the international standard, rose 
3.2% to $78.46 after the United States and Iran each said the Strait of Hormuz 
is under its control. Fighting between the two has kept oil tankers from using 
the strait to deliver crude to customers worldwide from the Persian Gulf, which 
drives up fuel prices worldwide.

   The upward pressure on inflation eats away at many companies' profits, and 
the S&P 500 fell 0.2%, coming off its fourth winning week in the last five. The 
Dow Jones Industrial Average was up 127 points, or 0.2%, as of 9:35 a.m. 
Eastern time, and the Nasdaq composite was 0.7% lower.

   Chip stocks like Micron Technology led the way lower. Micron tumbled 6.1%, 
eating into what had been a stellar rise of 243.1% for the year so far. Real 
profits are behind the rise because the AI rush has created surging demand for 
computer memory and other computing building blocks.

   But worries are rising that stock prices have shot too high and that the 
demand may not be sustainable if AI doesn't deliver as much profit and 
productivity as expected.

   The day's losses began in Asia, where South Korea's Kospi index dropped 
8.9%. That included a 15.4% plunge for SK Hynix in Seoul, the worst since its 
stock began trading in 1997.

   The South Korean maker of computer memory just launched shares of its stock 
trading in the United States on Friday, raising roughly $26.5 billion. Those 
shares jumped 13.1% in their first day of trading, but they fell 7.6% Monday.

   Other areas of the AI industry held up better. Taiwan Semiconductor 
Manufacturing Co.'s shares in Taiwan rose 1% after the chipmaker said its 
revenue in June jumped nearly 68% from a year earlier. That brought its total 
revenue growth for the first half of the year to 35.6% from a year earlier.

   TSMC's stock that trades in the United States added 0.1%.

   Much of Wall Street's attention this week will be on profit reports from 
companies saying how much they earned during the spring from April through 
June. On Tuesday alone, Bank of America, Citigroup, JPMorgan Chase, Goldman 
Sachs and Wells Fargo are all releasing their latest quarterly results.

   Analysts are forecasting that companies in the S&P 500 index will deliver 
overall growth of 23.6% from a year earlier, according to FactSet. If they're 
right, it would be the second straight quarter of growth better than 20%.

   Companies across industries will need to deliver strong growth to justify 
the big moves their stock prices have made. Indexes are near records despite 
sharp recent swings due to worries around AI stocks.

   Companies usually turn in results that top analysts' expectations, including 
in 37 of the past 40 quarters, according to FactSet. If S&P 500 businesses do 
so again by the usual margin, earnings growth for the latest quarter could end 
up being the best since the end of 2021.

   In the bond market, Treasury yields rose with the price of oil. The yield on 
the 10-year Treasury climbed to 4.58% from 4.56% late Friday and from just 
3.97% before the war with Iran began.

   Yields have risen worldwide on worries about expensive oil and high 
inflation, which could push the Federal Reserve and other central banks to 
raise interest rates. Higher rates can keep a lid on inflation, but they also 
slow the economy and hurt prices for all kinds of investments.

   In stock markets abroad, indexes were mixed amid mostly modest movements in 
Europe.

   In Asia, the swings were sharper, beyond South Korea's plunge. Stocks fell 
2.1% in Shanghai, and Japan's Nikkei 225 dropped 1.9%

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this 
report.

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