Wall Street drops on Mideast tensions

Credit: Reuters Studio
Published on January 3, 2020 - Duration: 01:11s

Wall Street drops on Mideast tensions

Wall Street's major indexes fell from record highs Friday after a U.S. air strike in Iraq ratcheted up tensions in the Middle East and a bigger-than-expected contraction in the U.S. manufacturing sector raised concerns of slowing economic growth.

Fred Katayama reports.

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Wall Street drops on Mideast tensions

Investors sold stocks Friday and sought safety in defensive assets after a U.S. airstrike in Iraq escalated tensions in the Middle East.

Oil and gold prices shot higher as did the and the Japanese yen.

Also hurting sentiment: U.S. manufacturing sector shrank more than expected in December.

The big indexes shed more than seven-tenths percent.

For the week, the Dow and S&P 500 dipped a fraction.

Kendall Capital CEO Clark Kendall: SOUNDBITE: KENDALL CAPITAL CEO CLARK KENDALL (ENGLISH) SAYING: "This has been an excuse to move to the side, to take a breath.

We seem to have moved, since October 1st it has been a straight up, 45 degree trajectory for the markets." News of the airstrike drove up shares of defense contractors led by Lockheed Martin, Northrop Grumman, and L3Harris Technologies.

It also pushed investors to sell travel and leisure stocks.

Legacy carriers American, United, and Delta fell.

So did cruise operator Carnival.

The sharp rise in crude oil prices lifted shares of energy stocks Hess, Cimarex and Apache, among others.

Class="kln">Tesla shares hit a record high after the electric car maker's quarterly vehicle deliveries beat Wall Street's targets.

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