US midday: Stocks off slightly as tensions in Ukraine mount
- NATO confirms presence of Russian troops in Ukraine
- Economic data comes in ahead of forecasts
- Industrial metal stocks weakest
Dow Jones Industrials: -0.18%
Nasdaq Composite: -0.19%
S&P 500: -0.11%
US stocks slumped as tensions in Ukraine flared and better-than-expected US reports on economic growth and weekly jobless claims fuelled speculation of an interest rate hike.
The second estimate for US gross domestic product (GDP) showed that the American economy grew by an annualised rate of 4.2% in the second quarter.
It was higher than the initial estimate of 4% growth in the advance report and surprised analysts who had expected a small downwards revision to 3.9%.
It also marked a stronger-than-expected rebound from the 2.1% contraction registered in the first three months of the year.
Thursday's revision showed that the increase in business investment was larger than previously thought.
"These figures confirm the strength of the US economy, and judging by recent figures, it is not going to run out of momentum any time soon," said Nancy Curtin, the chief investment officer at Close Brothers Asset Management.
"While sluggish wage growth remains a key consideration for the Fed, the employment figures continue to show the strength of the labour market. [...] The prospect of a change in monetary tightening is one cloud on the horizon, but it should not be a cause for undue concern."
Acting as a backdrop, NATO said that "well over" 1,000 Russian troops were now supporting Ukrainian rebels from directly within the country.
In other economic data on Thursday, US initial jobless claims fell by 1,000 to 298,000 in the week to 23 August, under the 300,000 consensus forecast. The previous week's level was revised up by 1,000 to 299,000.
In company news, Williams-Sonoma declined after its third-quarter earnings forecast missed analysts' estimates.
Abercrombie & Fitch Co. dropped as second-quarter sales fell more than analysts had projected.
Guess? slumped after the retailer cut its annual earnings forecast.
From a sector standpoint the worst performance was being seen in the following industrial groups: coal (-1.67%), iron and steel (-1.36%) and industrial metals (-1.26%).
Crude futures gain
Front month West Texas crude futures gained 0.76% to $94.60 per barrel on the NYMEX.
US 10-year Treasury yields were off by two basis points to 2.34%.
AB