U.S. stocks lost their morning gains, with the Dow falling more than 100 points on news of fresh Russia, Ukraine conflict.
“That’s the sole reason for the pullback,” said Peter Boockvar, chief market analyst at The Lindsey Group.
Bond yields fell, and gold prices dropped before recovering to trade near earlier levels. Crude oil gained.
The Dow Jones Industrial Average lost most of its gains for the year as it dropped more than 100 points following the news, with Boeing the hardest hit and Coca-Cola retaining the lead among blue-chip advancers.
“Unfortunately [the geopolitical conflict] is right back to page one, and that’s not what we need,” said Art Hogan, chief market strategist at Wunderlich Securities. When this happens, “we tend to largely ignore things which are fundamental.”
Despite return of geopolitical concerns, Scott Brown, chief economist at Raymond James, was still optimistic about the economy.
“The recover here is still intact,” he said.
The economic data flow resumed in the U.S. on Friday, starting with the Producer Price Index that rose 0.1 percent in July, in line with expectations.The Empire State Manufacturing Index fell in August. Industrial Production rose 0.4 percent, with the highest rate of utilization since June 2006. Consumer sentiment was a disappointing 79.2, the lowest since November last year.
Stocks dipped before continuing a positive trend after the reports.
“I think [the data] was basically a non-event—what the markets want to hear,” said Marc Chaikin, CEO of Chaikin Analytics.
Monster Beverages rose about 30 percent on Friday morning, boosted by Thursday’s news of Coca-Cola taking a 16.7 percent stake in the firm.
“Certainly Coke leading blue-chips is good because it’s been a laggard,” Chaikin said.
Ukrainian artillery destroyed a “significant” part of a Russian armoured column that crossed into Ukraine during the night, President Petro Poroshenko told British Prime Minister David Cameron on Friday, according to the presidential website.
Separately, a Ukrainian military spokesman said Ukrainian forces had tracked the Russian armoured column as soon as it crossed onto Ukrainian soil.
“Appropriate actions were undertaken and a part of it no longer exists,” military spokesman Andriy Lysenko told journalists.
Russia, meanwhile, accused Ukraine of attempting to disrupt its humanitarian aid mission to eastern Ukraine and called for a ceasefire in the region to allow for the deliveries.
On Thursday, in a speech in Crimea, which Russia annexed from Ukraine in March, Russian President Vladimir Putin struck a conciliatory tone: “We will do everything in our power so that this conflict is ended as soon as possible, so that the blood can stop flowing in Ukraine.” The 280-truck Russian convoy is said to have arrived close to the border with eastern Ukraine, near a crossing point controlled by pro-Russian separatists.
Over in the Middle East, a new truce remains in effect after Israel and Palestinian factions agreed to extend the ceasefire for five more days on Wednesday.
Applied Materials was at the top of Nasdaq 100 gains on Friday after the firm reported that it earned 28 cents per share for its third quarter, excluding certain items, one cent above estimates, with revenue essentially in line. The maker of semiconductor manufacturing equipment was helped by increased spending by manufacturers to make mobile phone and memory chips.
Estee Lauder reversed an earlier decline to rise slightly after the beauty products maker reported fiscal fourth quarter profit of 66 cents per share, beating estimates by ten cents, with revenue also above forecasts. The company said it had a strong quarter despite slower industry growth in some key countries.will post results before Wall Street opens on Friday.
Activist investor Carl Icahn also reported a 6.6 percent stake in Gannett on Thursday, saying his firm took the stake on the view that splitting the media company into separate print and broadcast firms could create value, a regulatory filing showed Thursday.
The S&P 500 fell 5 points, or 0.28 percent, to 1,949.46, with telecommunications the greatest laggard and utilities and energy the only gainers among the 10 sectors.
The Nasdaq fell 7 points, or 0.16 percent, to 4,446.53.
On the New York Stock Exchange, two stocks fell for every gainer, with an exchange volume of 291 million and a composite volume of more than 1.2 billion in mid-morning trading.
The U.S. dollar fell against major world currencies.
The yield on the benchmark U.S. 10-year Treasury fell to trade near 2.32 percent.