Reuters – Oil prices rose on Monday after Israel Prime Minister Benjamin Netanyahu said Iran had lied about pursuing nuclear weapons after signing a 2015 deal with global powers, while U.S. stocks fell with declines in healthcare shares.
Netanyahu said Iran had continued to preserve and expand its nuclear weapons knowledge after the deal.
U.S. President Donald Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the 2015 agreement over its nuclear program.
Prices of the Brent June contract LCOc1, which expires Monday, gained 53 cents to settle at $75.17 a barrel. Prices for the more actively traded Brent July contact LCOc2 gained 90 cents to settle at $74.69.
U.S. West Texas Intermediate futures CLc1 were up 47 cents on the day to settle at $68.57.
“The larger issue driving this is what will Trump do with Iran? And what will Iran do in response? And that uncertainty is the fundamental driver, not so much Netanyahu,” said Walter Zimmerman, chief technical analyst for United-ICAP.
Higher oil prices added to weaker sentiment in the stock market. While earnings have been strong this reporting period, U.S. companies have raised concerns about rising oil and other commodity prices.
But the healthcare sector .SPXHC, which dropped 1.6 percent, weighed most heavily on the S&P 500, as shares of Allergan plc (AGN.N) and Celgene Corp (CELG.O) led the sector’s slide.
The possibility that temporary exemptions on steel and aluminum tariffs might expire for several U.S. allies also weighed on U.S. stocks. Without an extension from Trump, the exemptions will expire on Tuesday.
Earnings and deal news provided support early in the session.
Reports of big M&A deals included U.S.-based Marathon Petroleum Corp’s (MPC.N) agreement to buy Andeavor (ANDV.N) and a tie-up between British supermarket chains Sainsbury’s (SBRY.L) and Walmart Inc’s (WMT.N) ASDA.[nL8N1S70YQ]
“The market doesn’t have a lot of upside momentum going. It rallies for a day or two but it just doesn’t follow through, and that’s been the case since the January-February correction,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida.
The Dow Jones Industrial Average .DJI fell 148.04 points, or 0.61 percent, to 24,163.15, the S&P 500 .SPX lost 21.86 points, or 0.82 percent, to 2,648.05 and the Nasdaq Composite .IXIC dropped 53.53 points, or 0.75 percent, to 7,066.27.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.21 percent. MSCI’s all-country index of global equities < .MIWD00000PUS> shed 0.32 percent. The MSCI global stock index rose for the month of April, its first positive month since January.
In the U.S. Treasury market, the yield curve flattened for a third straight session after economic data missed expectations.
The yield gap between U.S. 5-year notes and 30-year bonds narrowed to 27.20 basis points US5US30=TWEB, the tightest spread in more than six years. Investors look at the U.S. yield curve for clues about the future economic outlook.
Data showed U.S. personal income rose just 0.3 percent in March, compared with expectations of 0.4 percent.
Benchmark 10-year Treasury notes US10YT=RR last rose 1/32 in price to yield 2.955 percent, from 2.957 percent late on Friday.
Weaker-than-expected German data hurt the euro early against the U.S. dollar.
German monthly retail sales unexpectedly dropped in March, dampening cheer around a consumer-led upswing in Europe’s biggest economy. Regional data showed annual inflation in four German states steady in April.
The dollar index .DXY rose 0.33 percent, with the euro EUR= down 0.02 percent to $1.2075.
The Federal Reserve is also due to meet this week, and while no rate hike in benchmark U.S. interest rates is expected, investors will look for clues on the future pace of increases.
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Reporting by Caroline Valetkevitch; Additional reporting by Ayenat Mersie, Karen Brettell and April Joyner in New York; editing by Lisa Shumaker and James Dalgleish