Oil surges, stocks drop after U.S. kills Iranian general

Stocks fell broadly on Wall Street and oil prices surged Friday after a U.S. strike killed a top Iranian general in Iraq, raising tensions in the Middle East.

The selling, which lost some momentum toward the end of the day, ended a five-week winning streak for the S&P 500 a day after the benchmark index hit its latest record high.

The price of U.S. crude oil climbed 3.1%. Investors sought safety in U.S. government bonds, sending their yields lower. The price of gold rose.

Technology, financial and health care stocks accounted for much of the selling. Companies that rely on consumer spending also fell, along with airlines. Several energy stocks got a boost from higher oil prices. Defense contractors also notched gains.

The strike marks a major escalation in the conflict between Washington and Tehran, as Iran vowed “harsh retaliation” for the killing of the senior military leader.

“Until now, the two big risks have been policy — trade and the Fed,” said Jeff Kravetz, regional investment director at U.S. Bank Private Wealth Management. “This introduces a wild card, which is a third risk: rising political tensions in the Middle East.”

The S&P 500 dropped 23 points, or 0.7%, to 3,234.85. The index ended with a 0.2% loss for the week.

The Dow Jones industrial average fell 233.92 points, or 0.8%, to 28,634.88. The index briefly dropped 368 points.

The Nasdaq lost 71.42 points, or 0.8%, to 9,020.77. The Russell 2000 index of smaller company stocks gave up 5.90 points, or 0.4%, to 1,660.87.

The major stock indexes were coming off record highs after closing out 2019 earlier in the week with the best annual performance by the S&P 500 and Nasdaq since 2013.

Investor sentiment has been mostly positive in recent weeks as concerns about the strength of the...