Wall street tumbles on news of Iran’s missile attack on US airbase in Iraq

Wall Street’s major indexes declined on Tuesday as investor caution persisted amid a dispute between the United States and Iran, while energy shares fell as oil prices gave back some recent gains. After the bell, S&P 500 futures fell 1% following reports that rockets were fired at an airbase in Iraq hosting U.S. forces.

The late-day drop in S&P 500 futures suggests investors expect Wall Street to open at a loss on Wednesday.
During Tuesday’s trading session, Exxon Mobil Corp and Chevron Corp declined with oil prices, which had rallied in recent days on escalating tensions between Washington and Tehran following the killing of a top Iranian military commander by the United States last week.

Chipmakers gained and helped to limit market losses, especially in the Nasdaq. The Philadelphia Semiconductor index rose 1.8% with Micron Technology Inc gaining 8.8% after brokerage Cowen & Co upgraded the chipmaker to “outperform.”

Equity investors have been jittery since late last week, when a U.S. drone strike killed Iranian Major General Qassem Soleimani, taking major indexes off record highs. “We’re trying to digest the Middle East action” and other news on the political front, said Jack Janasiewicz, portfolio manager at Natixis Investment Managers’ Multi-Asset Portfolio Solutions group in Boston.

“It’s a little bit of a step back, take a breath, consolidate a little bit,” he said. “But we’re going to start to head into earnings, and that’s going to be the next catalyst for the market.” Major U.S. companies begin reporting fourth-quarter results next week, with S&P 500 earnings forecast as of Tuesday to have declined 0.6% in the quarter from a year ago, according to IBES data from Refinitiv.

The Dow Jones Industrial Average fell 119.7 points, or 0.42%, to 28,583.68, the S&P 500 lost 9.1 points, or 0.28%, to 3,237.18 and the Nasdaq Composite dropped 2.88 points, or 0.03%, to 9,068.58. Among gainers, Boeing Co shares climbed 1.1% after it said it was recommending that airline pilots undergo simulator training before they resume flying the 737 MAX, a shift from its previous position that pilots only needed computer-based training on new software following two fatal crashes.

Also, Microchip Technology Inc rose 6.7% after raising the midpoint of its third-quarter sales forecast.
Apache Corp soared 26.8% after it made a major oil discovery, with France’s Total SA, off the coast of Suriname.
On the economic front, data showed new orders for U.S.-made goods fell in November, pulled down by steep declines in demand for machinery and transportation equipment.

However, a reading on non-manufacturing sector activity for November came in better than expected. Declining issues outnumbered advancing ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.
The S&P 500 posted 37 new 52-week highs and one new low; the Nasdaq Composite recorded 94 new highs and 16 new lows. Volume on U.S. exchanges was 6.89 billion shares, compared with the 6.94 billion-share average for the full session over the last 20 trading days.