The stock markets in the United States declined as investors decided to stay in the sidelines due to concerns that the conflict in Ukraine would lead to further sanctions against Russia.
Today, President Barack Obama said Russian President Vladimir Putin is directly responsible to compelling the separatists in Ukraine to allow international investigators to recover the remains of the people that were killed in the crashed Malaysian Airlines and to collect evidences from the crash site.
President Obama said, “The burden is now on Russia. He added, “Russia will only further isolate itself from the international community” and costs will “only increase” if it does not convince the separatists to cooperate. President Obama also stated that he prefers a diplomatic solution to the conflict in Ukraine.
On the other hand, Malaysian Prime Minister Najib Razak said the leader of the pro-Russian separatist group agreed to allow international investigators to access the crash site, handover remains of those who lost their lives and the black boxes of the Malaysian Airlines that was shot down last week.
The United States is urging the governments in the European region to impose more sanctions against Russia as part of an effort to stop Putin’s support for the pro-Russian separatist group in Ukraine.
Matthew Kaufer, a manager at Federated Investor, Inc. commented, “The geopolitical situation is an overarching damper in the market and underneath that thus week we’re right in the heart of second-quarter earnings. While the market is net focused on earnings, we’re still trying to keep a pulse on what’s going on around the world.”
On the other hand, Matt Maley, an equity strategist at Miller Tabak & Co LLC commented, “The market is looking for something to have a real impact, something concrete, like a cut-off in oil supply or more sanctions. If Obama had said something concerning further sanctions, then there would’ve been some fundamental bite, but there was nothing to it.”
Meanwhile Patrick Spencer, head equity sales at Robert W. Baird & Co, opined that people are naturally cautious about geopolitical events. According to him, “Markets are nervous given we haven’t had a correction yet, so people are thinking we’re overdue. People are just looking for reasons for the market to sell off.”
U.S. Markets
- Dow Jones Industrial Average (DJIA)- 17,051.73 (-0.28%)
- S&P 500- 1,973.63 (-0.23%)
- NASDAQ- 4,424.70 (-0.17%)
- Russell 2000- 1,147.33 (-0.37 %)
European Markets
- EURO STOXX 50 Price EUR- 3,137.06 (-0.86%)
- FTSE 100 Index- 6,728.44 (-0.31%)
- Deutsche Borse AG German Stock Index DAX- 9,612.05 (-1.11%)
Asia-Pacific Markets
- Nikkei 225- 15,215.71 (-1.01%)
- Hong Kong Hang Seng Index- 23,387.14 (-0.29%)
- Shanghai Shenzhen CSI 300 Index- 2,166.30 (+0.10%)
Stocks in Focus
The stock price of Allergan, Inc. (NYSE:AGN) climbed more than 2% to $171.24 per share after the maker of Botox wrinkle remover, announced that it will eliminate 1,500 jobs to prevent the hostile takeover of Valeant Pharmaceuticals Intl Inc (NYSE:VRX). The company also reported earnings that beat the consensus estimates of Wall Street analysts.
The shares of EMC Corporation (NYSE:EMC) increased 5% to $28.32 per share Elliott Management disclosed that it acquired a stake in the company worth more than $1 billion worth of share. The activist hedge fund is urging the data-storage provider to spin off VMware, Inc. (NYSE:VMW), its software development business. The stock price of VMware dropped more than 2% to $92.95 per share.
Hasbro, Inc. (NASDAQ:HAS) fell more than 2% to $51.78 per share after reporting lower than expected second-quarter earnings. The toy maker said its adjusted earnings were $0.36 per share while its revenues were $829.3 million compared with the $837.7 million in revenues expected by analysts.
