Stocks end flat; oil prices fall on U.S. pullout from Iran deal

The major U.S. stock indexes mostly recovered from a daylong slide in the final minutes of trading Tuesday, finishing essentially flat.

The indexes had been drifting slightly lower as investors weighed the Trump administration’s decision to withdraw from a 2015 nuclear deal with Iran and reinstate sanctions on the country.

The policy change, announced by President Trump, had been largely expected by traders, who sent crude oil prices sliding more than 2%. A day earlier, crude settled above $70 a barrel for the first time in more than three years.

Healthcare, utilities and consumer-goods companies were among the biggest decliners Tuesday. Banks, technology firms and industrials posted gains. Energy sector companies also eked out a gain after slumping much of the day on lower oil prices.

“At least for the moment, the movement in oil is moderate and seems to be more or less what the market was expecting,” said Phil Guarco, global investment specialist at J.P. Morgan Private Bank. “While this [Iran deal announcement] is big news, it is not something that the market hadn’t already priced in. Now we have to see what the reactions are.”

The Standard & Poor’s 500 index ended the day down 0.71 of a point, or 0.03%, at 2,671.92. The Dow Jones industrial average edged up 2.89 points, or 0.01%, to 24,360.21. The Nasdaq composite rose 1.69 points, or 0.02%, to 7,266.90.

Smaller companies fared better than the rest of the market. The Russell 2000 index of smaller-company stocks ticked up 7.44 points, or 0.5%, to 1,586.39.

The major stock indexes spent much of the day in the red and oil prices slumped as investors awaited Trump’s announcement on the U.S.-Iran policy.

In televised remarks, Trump said the United States was withdrawing from the Iran nuclear deal, which he called “defective at its core.” The move reinstalls sanctions on the Iranian regime. The 2015 agreement required Iran to curb its nuclear enrichment program in exchange for relief from international sanctions.

After Trump’s remarks, oil prices pared some of their earlier losses. Benchmark U.S. crude ended the day down $1.67, or 2.4%, at $69.06 a barrel in New York. Brent crude, used to price international oils, fell $1.32, or 1.7%, to $74.85 a barrel in London.

So why didn’t prices keep climbing Tuesday?

“It’s all really in the expectations,” Guarco said. “The market was pricing in something even more aggressive. Still, things are very fluid, and oil markets could turn on a dime if it seemed that the potential for a supply disruption got meaningfully larger.”

Energy stocks mostly tumbled, then reversed direction and went up. Marathon Oil led the gainers, rising 3.4% to $20.44.

Several companies — including Airbus, Boeing and energy firm Total — that have struck business deals in Iran and could be looking for exemptions from U.S. sanctions, finished slightly lower. Boeing fell 0.6% to $338.37. Total slipped 0.5% to $61.67.

Corporate deal news also helped move the market.

Shire rose 4.6% to $40.35 after the Ireland-based pharmaceutical company agreed to be acquired by Japanese drugmaker Takeda in a deal worth $62.4 billion. Takeda shares slipped 0.1% to $20.98.

Comcast fell 5.6% to $30.59 on reports that it wants to make a new offer for the entertainment businesses that Twenty-First Century Fox agreed to sell to Disney. Fox slipped 0.1% to $37.99. Disney slid 0.7% to $101.79.

Xcerra climbed 3.1% to $13.24 after the semiconductor equipment-testing company accepted a cash and stock takeover offer valued at $764.4 million from competitor Cohu. Cohu tumbled 6.3% to $21.87.

Valeant Pharmaceuticals climbed 8.9% to $19.77 after the drugmaker reported a solid first quarter and said it would change its named to Bausch Health Cos.

Bond prices fell. The yield on the 10-year Treasury rose to 2.97% from 2.95%. The rise in yields pushed up interest rates, which enables banks to make more money from loans. That helped drive up financial sector stocks. Capital One Financial shares rose 1.4% to $90.18.

The dollar fell to 109.02 yen from 109.06 yen. The euro weakened to $1.1858 from $1.1923.

Gold slipped 40 cents to $1,313.70 an ounce. Silver fell 2 cents to $16.47 an ounce. Copper fell 2 cents to $3.06 a pound.

In other energy futures trading, heating oil fell 3 cents to $2.16 a gallon. Wholesale gasoline fell 2 cents to $2.11 a gallon. Natural gas fell a penny to $2.73 per 1,000 cubic feet.

Major indexes in Europe finished mostly down. Germany’s DAX fell 0.3% while the CAC 40 in France edged down 0.2%. Britain’s FTSE 100 was flat.

Markets in Asia ended mixed. Japan’s Nikkei 225 stock index rose 0.2%, and Hong Kong’s Hang Seng index climbed 1.4%. South Korea’s Kospi lost 0.5%. Shares rose higher in Singapore and Taiwan, but they fell 1.9% in Indonesia after the government there reported economic growth slowed in January through March.

UPDATES:

2:05 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 7:05 a.m.