By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- Stocks ended mixed Friday, trimming or
erasing losses after falling on news of a clash between Ukrainian
and Russian military units on Ukraine soil. Major indexes posted
weekly gains despite the late flight out of riskier assets into
Treasurys.
The S&P 500 (SPX) fell 0.12 point, or less than 0.1%, to end
at 1,955.06 after trading as low as 1,941.40, leaving the index
with a 1.2% weekly gain. The Dow Jones Industrial Average (DJI)
trimmed a triple-digit loss to end the day down 50.67 points, or
0.3%, at 16,662.91, making for a weekly rise of 0.7%. The Nasdaq
Composite (RIXF) returned to positive territory, rising 11.93
points, or 0.3%, to 4,464.93 and notching a 2.2% weekly
advance.
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.
"Markets are reacting this afternoon to the ongoing
developments, but in the fog of war it makes little difference what
the specific elements are in each event. Instead, what drives
market valuations is the knowledge of applied costs. No matter how
Ukraine, Russia, and the separatists sort themselves out, the costs
continue to rise," said David Kotok, chief investment officer at
Cumberland Advisors, in a note.
The 10-year Treasury note yield (10_YEAR) fell more than 5 basis
points to less than 2.35% as investors sought safety by buying
Treasurys. Yields fall as Treasury prices decline.
Haven-related buying only provided a modicum of help for gold,
however, which trimmed losses but still settled at its lowest level
since Aug. 5. Friday's losses on the main benchmarks put a cap on
weekly gains. Stocks trimmed initial losses ahead of the closing
bell.
John De Clue, chief investment officer at the Private Client
Reserve of U.S. Bank, 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," he said.
Still, 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 sizable 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 it at the lowest level since November.
Stocks in focus
Monster Beverage (MNST) shares surged 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.
Autodesk Inc.(ADSK) shares led S&P losses after the
design-software company late Thursday forecast a tepid outlook.
Read more about the day's notable movers here.
In Asia, Hong Kong's Hang Seng Index finished at its highest
level in more than three years. European stocks ended lower after
headlines of conflict escalation in Ukraine.
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