Oil Tops $100, Wall Street Lower       07/23 09:28

   Oil prices are jumping again Thursday as increased fighting in the Middle 
East threatens to slow the global flow of crude. Wall Street, meanwhile, is 
sinking following sharp drops for two of its most influential stocks, Alphabet 
and Tesla.

   NEW YORK (AP) -- Oil prices are jumping again Thursday as increased fighting 
in the Middle East threatens to slow the global flow of crude. Wall Street, 
meanwhile, is sinking following sharp drops for two of its most influential 
stocks, Alphabet and Tesla.

   The S&P 500 dropped 1% and may be heading for its first back-to-back weekly 
loss since March. The Dow Jones Industrial Average was down 516 points, or 1%, 
as of 10 a.m. Eastern time, and the Nasdaq composite was 1.8% lower.

   Stocks sank under the pressure of rising oil prices, which raise costs for 
many businesses and limit their customers' ability to spend. The price for a 
barrel of Brent crude oil, the international standard, climbed 6.7% to $100.40.

   Earlier in the morning, it touched its highest price in two months following 
attacks on two Saudi oil tankers in the Red Sea. The attacks threaten another 
avenue that oil companies can use to transport their crude from the Middle East 
to customers worldwide, along with the Strait of Hormuz.

   Underscoring the importance of the sea route for the economy, U.S. President 
Donald Trump threatened "major military punishment" against the Houthi rebels 
in Yemen, who are backed by Iran, if they keep attacking ships.

   It was just a few weeks ago that Brent had dropped below $72 per barrel, 
roughly back to where it was before the United States and Iran attacked Iran to 
begin their war, on hopes that the Strait of Hormuz would fully reopen to oil 
tankers.

   The jumps in oil prices are threatening to reaccelerate inflation. That in 
turn could push the Federal Reserve and other central banks to raise interest 
rates, which would slow economies and undercut prices for stocks and other 
investments.

   The European Central Bank held interest rates steady at its meeting 
Thursday. But traders are banking on a nearly 36% chance the Fed will hike 
rates at its meeting next week. That's up from less than the 12% probability 
seen a week ago, according to data from CME Group

   That helped push the yield on the 10-year Treasury up to 4.70% from 4.67% 
late Wednesday and from just 3.97% before the war with Iran began. That's a 
significant increase, and it's already helped bring long-term U.S. mortgage 
rates to their highest levels in nearly a year.

   Stocks of companies with big fuel bills fell to sharp losses on worries 
about higher expenses.

   American Airlines lost 8.6% even though it reported a much bigger profit for 
the spring than analysts expected, something that usually sends a stock's price 
higher. It raised airfares, which helped it offset its higher fuel prices, 
during the latest quarter.

   Southwest Airlines gave back 4.7%, even though it also reported better 
profit and revenue than analysts expected. It wrung more profit out of each $1 
of its revenue during the spring, even with higher fuel prices.

   One of the heaviest weights on the U.S. stock market was Tesla, which sank 
12.6% after Elon Musk's electric-vehicle company reported a weaker profit for 
the latest quarter than analysts expected. Because it's one of the largest 
stocks in the S&P 500 by market value, its stock has more influence on the 
index than nearly every other.

   One of the few that's larger is Alphabet, and its stock fell 6.2% even 
though the parent company of Google delivered stronger profit and revenue than 
analysts expected.

   Investors seemed to be focusing instead on how much more Alphabet said it's 
set to spend on artificial-intelligence investments. CEO Sundar Pichai said AI 
demand helped its cloud revenue growth accelerate to 82% last quarter, but 
unease nevertheless remains about whether all the billions of dollars Alphabet 
is pouring into the technology will pay off in terms of productivity and 
profits.

   Such worries have been shaking the AI industry broadly in recent weeks, 
leading to big swings for the overall stock market.

   In stock markets abroad, indexes fell sharply in Europe as oil prices 
jumped. France's CAC 40 dropped 1.5% for one of the larger losses.

   Indexes earlier in the day were stronger in Asia, where South Korea's Kospi 
jumped 4.4%.

   ___

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

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