Ukraine Conflict Weighs on US Stocks 08/28 15:48
U.S. financial markets ended slightly lower Thursday, marking their first
loss in a week of record highs.
(AP) -- U.S. financial markets ended slightly lower Thursday, marking their
first loss in a week of record highs.
The escalating conflict in Ukraine, disappointing retail earnings and profit
outlooks combined to weigh down the market, eclipsing some good news on the
U.S. economy and labor market.
"The key driver was largely the Ukraine news and the uncertainty of what
that means," said Erik Davidson, deputy chief investment officer at Wells Fargo
U.S. stock index futures pointed to a lower opening in premarket trading
Thursday, following a downward turn in global stock markets as traders reacted
to the developments in Ukraine.
Ukraine President Petro Poroshenko said Russian forces had entered his
country. He called an emergency meeting of the nation's security council. The
yield on the 10-year Treasury note declined as investors sought out lower-risk
A string of disappointing earnings and profit outlooks late Wednesday and
early Thursday also weighed on the market early on.
Not all the news was discouraging.
The Commerce Department estimated that the U.S. economy grew at an annual
rate of 4.2 percent in the April-June quarter.
The Labor Department added to the good news, saying the number of Americans
seeking unemployment benefits slipped last week to 298,000, a low level that
signals employers are cutting fewer jobs and hiring is likely to remain strong.
"The economic data in the U.S. continues to look quite good," Davidson said.
Nonetheless, major U.S. stock indexes opened lower. They pared some of their
losses as the day went on, but remained down the rest of the day.
All told, the Standard & Poor's 500 index fell 3.38 points, or 0.2 percent,
to 1,996.74. The index hit record highs the first three days of the week.
The Dow Jones industrial average slid 42.44 points, or 0.3 percent, to
The Nasdaq composite shed 11.93 points, or 0.3 percent, to 4,557.69.
Major U.S. indexes are on track to end higher for the month and are up for
Trading volume was lighter than the recent average ahead of the Labor Day
Investors seized on the lackluster earnings to reduce their holdings in
Williams-Sonoma tumbled 12 percent after the cookware and home furnishings
company issue a disappointing full-year profit outlook late Wednesday. The
stock shed $8.96 to $65.93.
Tilly's lost 4.3 percent after the company forecast a difficult summer,
noting customer traffic was down and merchandise discounts were cutting into
its profit. The stock slid 37 cents to $8.15.
Genesco also declined after the apparel and footwear seller issued a profit
outlook that was shy of Wall Street's expectations. Genesco sank $6.73, or 7.6
percent, to $81.94.
Abercrombie & Fitch fell 4.8 percent after the teen clothing company
reported revenue that fell short of analysts' estimates. The stock slid $2.13
The poor earnings and outlooks from retailers ran counter to what has
otherwise been a strong corporate earnings season, which has helped drive a
late-summer revival for U.S. stocks.
The dour outlooks are particularly discouraging when one considers that the
sector is entering what traditionally is the best season for retailers, said JJ
Kinahan, chief strategist at TD Ameritrade.
"That does put a bit of a note of caution over everything," he said.
Elsewhere in the market, the price of oil rose for the third day in a row on
evidence of a stronger U.S. economy. Benchmark U.S. crude rose 67 cents to
close at $94.55 a barrel on the New York Mercantile Exchange.
Wholesale gasoline rose 0.7 cent to close at $2.753 a gallon and natural gas
rose 4.1 cents to close at $4.044 per 1,000 cubic feet.
Brent crude, a benchmark for international oils used by many U.S.
refineries, fell 26 cents to close at $102.46 on the ICE Futures exchange in
The yield on the 10-year Treasury note fell to 2.34 percent. In metals
trading, gold climbed $7 to $1,290.40 an ounce, silver rose 13 cents to $19.53
an ounce and copper fell 5 cents to $3.13 a pound.