As oil surges, US stocks drift lower in another muted day

NEW YORK (AP) — The price of crude oil surged Monday after the U.S. government moved to further block Iranian oil exports. That helped to lift energy stocks, but losses elsewhere in the market pulled U.S. indexes modestly lower in another relatively quiet day of trading.

The Trump administration said it will no longer exempt any countries from U.S. sanctions if they continue to buy Iranian oil, including China and Japan, the world's second and third largest economies. That helped the price of benchmark U.S. crude touch its highest level since October, and energy stocks in the S&P 500 jumped 1.3%.

Most other areas of the stock market were weaker, though, and seven of the 11 sectors that make up the S&P 500 index were lower. Real-estate stocks had some of the sharpest losses. Raw-material producers and companies that depend on discretionary spending by consumers were also weak.

Stock trading was relatively muted around the world, with markets in London, Frankfurt and other major markets closed for holidays.

The U.S. market itself has remained notably calm in recent weeks after following up a nearly 20% plummet late last year with a nearly mirror-opposite rebound. Investors will be getting several potentially market-moving reports later this week, including a cavalcade of corporate earnings reports and a read on how much U.S. economic growth slowed during the first three months of the year.

KEEPING SCORE: The S&P 500 dipped 0.1% as of 11 a.m. Eastern time. It remains within 1% of its record high, which was set in September.

The Dow Jones Industrial Average fell 59 points, or 0.2%, to 26,500, and the Nasdaq composite slipped 0.1%.

BUBBLING CRUDE: Benchmark U.S. crude surged $1.57, or 2.5%, to $65.64 per barrel. The leap tacks further gains onto the price of oil, which has been climbing since dropping below $43 in late December. Brent crude rose $1.96, or 2.7%, to $73.93 per barrel.

President Donald Trump made the move with the intent of bringing Iran's oil exports to zero. If successful, the move could increase demand for oil from U.S. allies Saudi Arabia and the United Arab Emirates but would heighten political tensions.

"The big fear now and perhaps the markets' next significant catalyst, will Iran retaliate with force?" said Stephen Innes of SPI Asset Management in a report.

Marathon Oil rose 3.5%, and Exxon Mobil gained 1.9%.

CUT DEEP: Intuitive Surgical fell to the largest loss in the S&P 500 after the robotic surgery system company reported weaker earnings for the latest quarter than Wall Street expected. It dropped 6%.

SUPPLY SURPRISE: W.W. Grainger sank 3.2% after the supplier of maintenance, repair and operating products reported weaker revenue for the latest quarter than analysts expected.

CLEANING UP: Kimberly-Clark jumped 6.6% for the biggest gain in the S&P 500 after the maker of Huggies diapers and Kleenex tissue reported stronger earnings and revenue for its latest quarter than analysts expected.

IT'S QUIET OUT THERE: The stock market has been notably calm, with no move for the S&P 500 of more than 0.7% in either direction after April 1.

Bigger moves may be ahead, with a crush of corporate earnings reports due this week. More than a quarter of the companies in the S&P 500 are scheduled to report, including Amazon.com, Exxon Mobil and Facebook.

Expectations are low for earnings broadly, and analysts are forecasting the first drop in profit for the S&P 500 in nearly three years. But most companies are reporting stronger profits than Wall Street had been expecting, which is typical.

Later this week, investors will also get a preliminary read on the economy's strength during the first quarter of the year. Economists expect the report to show that growth slowed to 1.8% from 2.2% in the fourth quarter of last year.

WORLD MARKETS: Markets around the world were mixed in relatively muted trading. The Nikkei 225 index in Japan rose 0.1%, and the Kospi in South Korea was virtually flat, while stocks in Shanghai lost 1.7%. Markets in Paris, Hong Kong and Sydney were closed for holidays.

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AP Business Writer Joe McDonald contributed from Beijing.