US midday: Stocks dragged lower by geopolitical tensions
- Putin calls for response to sanctions
- Oil stocks lead falls
- Strong services sector data
Dow Jones Industrials: -1.05%
Nasdaq Composite: -0.93%
S&P 500: -1.13%
An intra-day bounce in US stocks following better than expected readings on the country's services sector was derailed by reports that Russia might retaliate against recent Western sanctions.
Highlighting the multiple 'flash-points' with which the international comunity must contend with, late in the afternoon it was reported that a high-ranking US officer was killed in Afghanistan - not long before US troops are set to pull out.
On a more positive note, a temporary cease-fire in Gaza was successfully brokered
by Egypt.
Markit's purchasing managers index (PMI) on US services showed continued but slowing growth, with the index falling to 60.8 in July from 61 a month earlier, in line with expectations. A reading above 50 signals expansion.
Separately, the results of the ISM Institute's own PMI revealed activity levels in America's service sector at nine-year highs.
In sharp contrast with the above, earlier in the session figures from HSBC/Markit's PMI on China's services sector showed that growth ground to a halt in July. The China services PMI dropped sharply from 53.1 to just 50 in July; this was the lowest reading since records began in November 2005 and meant that the non-manufacturing sector neither grew nor contracted last month.
Another report on US factory orders showed a gain of 1.1% month-on-month in June after a fall of 0.6% a month earlier.
Gannett up, Target down
Gannett Co. jumped after the owner of USA Today said it will split into two companies, separating its publishing unit from its broadcasting and digital businesses.
Target retreated after cutting its estimate for second quarter profit on an expense generated from a December data breach.
Motorola Solutions slumped after quarterly earnings missed estimates.
Coach rallied after the luxury handbag maker said it made a profit in the fourth quarter that exceeded analysts' projections.
From a sector stand point the worst performance was to be seen in oil equipment (-2.41%) and oil and gas producers (-2.27%).
The yield on US 10-year Treasuries was down by one basis point at 2.49%.
West Texas Intermediate crude futures fell 1.06% to $97.25 per barrel, according to the NYMEX.
AB