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Stocks steady, gold pauses rally ahead of next US-Iran move

NEW YORK — U.S. stocks were mixed in afternoon trading on Tuesday, and gold and crude oil prices took a pause from their recent run as investors wait for the next step in the increasingly tense U.S.-Iran confrontation.

Benchmark U.S. crude dropped for the first time since before the United States killed Iranian Gen. Qassem Soleimani in a drone strike on Friday, a move that threatened to disrupt oil supplies in the Middle East and caused prices to spurt higher for days. The potential for war also sent dollars flowing out of risky investments like stocks and into gold and other safer harbours.

Asian and European stock markets clawed back much of their losses from Monday even as U.S. stocks were split. Three out of fives tocks in the S&P 500 fell, with drops for oil companies helping to offset modest gains for raw-material producers.

Gold slowed its momentum a day after touching its highest price in nearly seven years, and Treasury yields were also little changed.

The market’s return to a wait-and-see approach wasn’t that surprising to some investors, at least in hindsight. The S&P 500 remains within 0.6% of its record set on Thursday.

Rich Weiss, senior portfolio manager at American Century Investments, said the market may be more focused on the forecasts that companies will give in upcoming weeks for their 2020 earnings than on the U.S.-Iran tensions.

“The market seems to be looking right past it,” Weiss said. “It seems to be much more interested in the fundamentals: interest rates, earnings and trade tensions.”

KEEPING SCORE: The S&P 500 was down 0.2% as of 3 pm. Eastern time.

The Dow Jones Industrial Average fell 102 points, or 0.4%, to 28,600, and the Nasdaq composite rose by less than 0.1%.

MARKETS ABROAD: Asian markets had some of the day’s strongest gains and clawed back much of their sharp losses from Monday.

Japan’s Nikkei 225 jumped 1.6%, South Korea’s Kospi rose 0.9% and Hong Kong’s Hang Seng added 0.3%.

In Europe, Germany’s Dax returned 0.8%. France’s CAC 40 and the FTSE 100 in London were virtually flat.

TAKE A BREATH: Gold slowed its momentum and rose $5.50 to settle at $1,574.30 per ounce. It had climbed more than $16 each of the last two days as investors piled into what they thought could hold steady even if a war broke out in the Middle East.

U.S. officials were preparing for an Iranian response to their drone strike against Soleimani and warned ships about the possibility of action against U.S. interests in Mideast waterways or other retaliations.

DRILLED: Benchmark U.S. crude gave up some of its big gains made in recent days on worries about supplies. It dropped 57 cents to settle at $62.70 per barrel. It had jumped more than $2 per barrel over the last two days.

Brent crude, the international standard, fell 64 cents to $68.27 a barrel.

That helped put at least a temporary halt to the recent rise for energy stocks. Chevron fell 1.7%, Exxon Mobil lost 1.2% and Schlumberger fell 1.2%.

EXCEPTION: Apache was an outlier, and the oil and gas producer surged 24.9 % for the biggest gain in the S&P 50 after it and Total said they found a significant amount of oil off the coast of Suriname.

YIELDS: The yield on the 10-year Treasury inched up to 1.82% from 1.81% late Monday.

ECONOMIC SIGNS: A pair of reports showed that U.S. manufacturing continues to wane, but not by enough to drag down the rest of the economy.

Manufacturing has been weak in the country and around the world, hurt by tariffs and trade wars, and a U.S. Commerce Department report showed that factory orders fell 0.7% in November from a month earlier. It was the third drop in the last four months.

But even with that weakness, the solid U.S. jobs market and spending by households have helped prop up the rest of the economy. A separate report released Tuesday morning showed that the nation’s services industries grew at a faster pace last month than economists expected. The reading includes activity in the retail, health care and other industries.

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AP Business Writer Elaine Kurtenbach contributed.

Stan Choe, The Associated Press