By Anora Mahmudova and Carla Mozee, MarketWatch
Kate Spade, Intercept shares jump
NEW YORK (MarketWatch) -- U.S. stocks opened lower Tuesday as
investor optimism sagged amid tension between Ukraine and Russia
and lingering concerns about sectarian wars in the Middle East.
Investors are waiting for a monthly report on job openings for
clues to the pace of economic recovery in the U.S.
The S&P 500 (SPX) opened 3.5 points, or 0.2%, lower at
1,933.45. The Dow Jones Industrial Average (DJI) lost 30.31 points,
or 0.2%, to 16,542.08 at the open. The Nasdaq Composite (RIXF)
began the day down 6.5 points, or 0.1%, at 4,395.36.
Geopolitical news took a center stage on Tuesday, undermining
the optimism among global investors. Haven assets, such as U.S.
Treasurys and gold were higher, while equities suffered.
Tensions between Ukraine and Russia escalated after Russian sent
a convoy carrying aid for eastern Ukraine on Tuesday. Kiev said it
would not allow the vehicles to cross onto its territory, claiming
the convoy was carrying military gear in the guise of aid.
Meanwhile, clashes between ISIS and Kurdish forces
continued.
In economic news, the Bureau of Labor Statistics will release
its June job openings and labor turnover survey, or JOLTS, at 10
a.m. Eastern Time. Federal Reserve Chairwoman Janet Yellen often
cites the survey when she assesses the state of the labor
market.
Details will include the number of workers who were hired, fired
or laid off, or who quit their jobs, in June. JOLTS data for May
showed monthly job openings hit 4.6 million, compared with 4.3
million when the recession started at the end of 2007.
The National Federation of Independent Business's gauge of small
businesses, released early Tuesday, showed sentiment edged higher
in July. Small businesses account for the bulk of U.S.
employment.
Stocks rose Monday, led by small-cap stocks, in what was
described as a relief rally after the selloff over the past two
weeks. Equities have been under pressure on concerns the Fed will
raise interest rates sooner rather than later as well as on broader
worries about a trade war between Russia and the West. The Russell
2000 (RUT), an index of small-cap companies, closed up 0.9%, and
the S&P 500 (SPX) ended 0.3% higher.
Stocks in focus
Shares of Kate Spade (KATE) soared 9% Tuesday, putting them on
track to open at the highest level seen since April 2007, after the
handbags and accessories maker reported better-than-expected
second-quarter profit and sales.
Shares of Intercept Pharmaceutical (ICPT) leapt 49%, after the
company late Monday issued positive data about an experimental
treatment for liver disease.
Flowers Foods shares (FLO) stumbled 6.1% after disappointing
quarterly results and yearly forecast from the bakery goods
company, whose brands include Nature's Own.
Tesla Motors (TSLA) was off 0.1%. Consumer Reports magazine said
its long-term ownership of the Tesla Model S electric car has been
mostly positive, but there have been several reliability problems
with the car, echoing a similar result from Edmunds.com.
Apple shares (AAPL) edged up 0.3%, following a Bloomberg report
that production of new iPad models has begun. (Read more about the
day's notable movers here:
http://www.marketwatch.com/story/tesla-kate-spade-are-tuesdays-stocks-to-watch-2014-08-12.)
German stocks stumble, gold rises
Elsewhere, Germany's DAX 30 index fell after key ZEW
economic-sentiment figures came in sharply lower than anticipated.
Those expectations "were understandably low, given the data over
the last few months and the deteriorating trade relationship
between Europe and Russia," said Craig Erlam, market analyst at
Alpari UK, in emailed comments.
Oil futures (CLU4) fell nearly $1 a barrel, turning lower after
the International Energy Agency said world oil demand will rise
less than previously thought this year. The IEA also said there's
ample supply of oil for the market.
Gold futures (GCZ4) gained $4.6 an ounce. Asian markets were
mixed, with Japan's Nikkei Average up 0.2%.
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