Stocks – S&P Falls as U.S.-Iran Tensions Still Unsettle Risk Appetite

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U.S. stocks closed lower Tuesday, led by a fall in energy stocks amid ongoing U.S.-Iran tensions.

The S&P 500 lost 0.28%, while the Dow Jones Industrial Average slumped 0.42%. The Nasdaq composite fell 0.03%,

With fears fading that Iran would choose to engage in all-out war with the U.S., and risk detablizing oil supplies in the Middle East, traders reined in their bullish bets on oil.

Oil prices settled 1% lower, prompting a sea of red in energy stocks that offset small gains in technology and weighed on the broader market.

In energy, Halliburton (NYSE:HAL) and Chevron (NYSE:CVX) were among the biggest losers. But Apache (NYSE:APA) surged 26% after announcing – together with its joint venture partner – a significant oil discovery at a well located off the coast of Suriname.

Preliminary data evaluating the Maka Central-1 well “indicates the potential for prolific oil wells” and noted that “the size of the stratigraphic feature … suggests a substantial resource,” Apache said.

Gains in tech stocks, however, softened the blow in the broader market, largely thanks to surge in chip stocks, led by a rallies in Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC).

The day of red on Wall Street arrived even as data showed signs the economy remained on firm footing, with services data for December topping economists’ forecasts.

In other company news, Tesla (NASDAQ:TSLA) rallied as it unveiled plans to build its Model Y vehicle in China. Shares of the electric automaker were also boosted by positive feedback from Wall Street.

Credit Suisse lifted its price target on the company. Moments before the closing bell, meanwhile, Argus Research raised its price target on Tesla (NASDAQ:TSLA) to $556 from $396.

Stocks – S&P Falls as U.S.-Iran Tensions Still Unsettle Risk Appetite