By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Coach jumps, Target, Motorola Solutions fall
NEW YORK (MarketWatch) -- U.S. stocks closed sharply lower on
Tuesday following reports that Russia is building up its military
presence on the border with Ukraine.
Fears that the Federal Reserve might raise interest rates sooner
than expected in the wake of fresh signs that the economy is
gaining strength lingered in the background.
The S&P 500 (SPX) closed 18.78 points, or 1%, lower at
1,920.21. The Dow Jones Industrial Average (DJI) dropped 139.81
points, or 0.8%, to 16,429.47. The Nasdaq Composite (RIXF) fell
31.05 points, or 0.7%, to 4,352.84.
Read the recaps of MarketWatch's live blog of today's
stock-market action.
The Financial Times reported that Russia has dramatically
increased the number of troops and vehicles positioned on its
eastern border with Ukraine during the past few days, reviving
fears among investors that the conflict could escalate. Separately,
Russian President Vladimir Putin ordered his government to prepare
retaliatory measures against U.S. and European economic sanctions
imposed on Russia.
Nichoalas Colas, market strategists at ConvergEx Group, a global
brokerage company based in New York, said it was eerie to see
investors start worrying about a possible full-blown war between
Ukraine and Russia on the 100th anniversary of the start of the
World War I.
"Over the past several months markets had shrugged off such a
possibility and discounted a potential for a real war. The news
that Russia might have its troops inside Ukraine instead of waging
a proxy war caught a lot of investors flatfooted," Colas said.
"If this is the beginning of a correction, we expect it to be a
slow-motion one. People are just not making sudden moves," he
added.
Also read: What's so bad about higher interest rates?
Tuesday's economic news showed U.S. service-sector companies
expanded in July at the faster pace in nine years, according to
survey of senior executives. Meanwhile, factory orders in June
climbed to the highest level on record and topped estimates
compiled by MarketWatch.
Company news
Among individual companies, shares in Coach Inc. (COH) rallied
4.3% after better-than-expected earnings.
Target Corp. (TGT) shares fell 4.4% after the retailer lowered
its outlook.
Walgreen Co.(WAG) fell 4.2% on reports of the drugstore chain's
intent to keep its headquarters in the U.S. after it takes over
British pharmacy chain Alliance Boots, rather than move its
domicile abroad to lower its tax bill.
Motorola Solutions Inc. (MSI) fell 4.2% after the
networking-systems company reported a drop in second-quarter sales
and guidance for the current period came in weaker than expected.
See today's notable Movers & Shakers.
Groupon, Inc (GRPN) shares plunged 13% in after-hours session
after reporting results. Live blog: Groupon's second-quarter
earnings report.
In other markets, the Nikkei 225 index fell to its weakest
closing level in more than a week, after the HSBC China services
purchasing managers index came in at the lowest reading in the
nearly nine-year history of the index. China is a big export market
for Japan manufacturers. Other Asian markets were generally lower
as well.
European stocks closed higher. September futures contracts for
both crude oil (CLU4) were lower and futures for gold (GCU4) rose
0.1% after the selling took hold in equity markets. The dollar
(DXY) held steady.
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