By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market reversed gains
and fell, as news of Ukrainian forces destroying Russian military
units that crossed on its territory pushed investors out of riskier
assets and into Treasurys on Friday.
The 10-year Treasury note yield fell 8 basis points to 2.3%,
while gold futures trimmed earlier losses. Friday's losses on the
main benchmarks put a cap on weekly gains.
The S&P 500 (SPX) fell 9 points, or 0.5%, to 1,945.98. The
Dow Jones Industrial Average (DJI) dropped 104 points, or 0.6%, to
16,608.32. The Nasdaq Composite (RIXF) lost 18 points, or 0.4% to
4,434.45.
Ukrainian forces destroyed part of a Russian military unit that
was on Ukrainian soil, a Ukrainian military spokesperson said
Friday, according to news reports. Separately, NATO's
secretary-general said the alliance observed a Russian "incursion"
into Ukraine, denied by Russia, on Thursday night, according to the
Associated Press.
The entanglement overshadowed more signs that the U.S. economy
remains healthy and that company profits are increasing. Industrial
production rose in July, thanks to a sizeable jump in car output,
the Federal Reserve said Friday.
Meanwhile, U.S. producer prices inched up in July, a second
consecutive month of gains, led by services such as transportation
and warehousing, the government reported Friday. That is one of
several recent inflation gauges that show price growth isn't
running too hot for the Fed.
Investors shrugged off a preliminary August reading on the
University of Michigan/Thomson Reuters consumer-sentiment index
that showed its at the lowest level since November.
John De Clue, chief investment officer at U.S. Bank Wealth
Management, said he isn't surprised that stocks have been so
resilient in the face of geopolitical concerns.
"Second-quarter earnings have been better than many of us
expected and the economy is growing. The fact that we are not
seeing larger pullbacks mean that investors are not alarmed by the
impact of geopolitical issues," De Clue said.
Stocks in focus
Monster Beverage (MNST) shares leapt to lead the S&P on
Coca-Cola's (KO) move to acquire a 17% ownership stake in the
energy drink company, as part of a long-term partnership deal. Coke
will make a $2.15 billion cash payment and transfer its global
energy drink business to Monster.
Applied Materials Inc. (AMAT) was among the biggest advancers in
the S&P, after the chip-making equipment provider's quarterly
sales and earnings report topped Wall Street expectations.
Achillion Pharmaceuticals (US-ACHN) rallied in heavy volume
following positive results from a clinical trial related to
sovaprevir, the company's experimental hepatitis C treatment.
SeaWorld Entertainment (SEAS) shares rallied after the company
confirmed that it will upgrade its killer whale tanks, succumbing
to public pressure from animal activists. Read more about the day's
notable movers here.
In other markets, 10-year Treasury yields fell 8 basis points to
2.31%. Oil futures (CLU4) rose 1.2% and gold futures (GCZ4) trimmed
losses to 0.5%. In Asia, Hong Kong's Hang Seng index finished at
its best level in more than three years. European stocks turned
lower after headlines of conflict escalation in Ukraine.
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