The stock markets in the United Stated declined as the European Union and Washington announced new sanctions against Russia today.
According to President Barack Obama, the new sanctions are designed to “increase pressure on Russia” to stop supporting the separatists’ violence in Ukraine.
The United Stated government put a sanction on the transactions of Russian banks including Bank of Moscow and the Russian Agricultural Bank with Americans. Washington also sanctioned Russia’s state-owned shipbuilder that supplies Russian navy, as well as its oil and gas industry.
The European Union also imposed new sanctions that will limit Russia’s state-owned financial institutions to EU capital markets, and implemented an embargo on trade in arms. According to the EU, the new sanctions “establish an export ban for dual use goods for military end users and curtail Russian access to sensitive technologies particularly in the field of the oil sector.”
Commenting on the new sanctions, Dan Veru, chief investment officer at Fort Lee told Bloomberg, Geopolitical risk remains a risk. What ultimately makes stocks go higher is earnings, and earnings are supporting higher valuations in the market.”
On the other hand, GAM portfolio manager Arvin Soh opined, “Unless something happens dramatically in the Middle East, and that’s not our expectation; our sense is that you really need to see a significant change in central bank policy before you start to see markets become a little more nervous, and you have a more sustainable selloff.”
• Dow Jones Industrial Average (DJIA)- 16,927.81 (-0.32%)
• S&P 500- 1,970.96 (-0.40%)
• NASDAQ- 4,443.74 (-0.03%)
• Russell 2000- 1,143.76 (+0.37%)
• EURO STOXX 50 Price EUR- 3,190.54 (+0.60%)
• FTSE 100 Index- 6,807.75 (+0.29%)
• Deutsche Borse AG German Stock Index DAX- 9,653.63 (+0.58%)
• Nikkei 225- 15,618.07 (+0.57%)
• Hong Kong Hang Seng Index- 26,640.53 (+0.87%)
• Shanghai Shenzhen CSI 300 Index- 2,331.37 (+0.37%)
Stocks in Focus
The stock price of Corning Incorporated (NYSE:GLW) declined more than 9% to $20 per share after the company reported lower than expected profit for the second-quarter. The Gorilla Glass maker posted a net income of $169 million, down from $638 million in the year-ago quarter. Its GAAP adjusted earnings were $0.37 per share compared with $0.38 consensus estimate. Corning’s revenue was $2.57 billion compared with the $2.53 billion estimated by analysts.
The shares of Herbalife Ltd. (NYSE:HLF) fell more than 13% to $58.35 per share after the seller of weight loss products posted earnings the missed the consensus estimates. The company also reduced its sales growth forecast this year in the range of 8.5% to 10.5% from 10% to 12%.
United Parcel Service, Inc. (NYSE:UPS) dropped more than 3% to $98.86 per share after the largest package shipping company lowered its 2014 outlook. The company reduced its full-year 2014 EPS guidance in the range of $4.90 to $5 per share. The shipping company reported adjusted earnings of $1.21 per diluted share on $14.27 billion in revenue.
Twitter Inc (NYSE:TWTR) shares surged up 30% in after hours trading after the company beat estimates. Revenue rose over 124% year compared to the quarter a year earlier. The company reported EPS of $0.02 compared to analyst estimates of a loss of $0.01 EPS. Revenue came in at $312 million, compared to forecasts of $283 million.