The stock markets in the United States decline as investors are becoming more concern regarding the escalation of the conflict in Ukraine.
Russian President Vladimir Putin instructed government officials to prepare a response to the sanctions imposed by the European Union and the United States. Putin said, “the political tools of economic pressure are unacceptable and run counter to all norms and rules.”
Last month, the U.S. Treasury Department added major Russian energy companies in the list of sanctions includinng Rosneft NK OAO (MCX:ROSN) (OTCMKTS:RNFTF), Novatek OAO (MCX:NVTK) (OTCMKTS:NVATY) as well as Russia’s Minister of Crimean Affairs, Oleg Savelyev, and others.
The sanctions against Russia effectively shut down medium and long-term funding in U.S. dollars, which further curbs the country’s already weakening economy.
President Putin eluded the sanctions against its energy sector by signing a $20 billion trade agreement with Iran, which could make Russia, the largest importer of oil from Iran. Under the agreement, Russia and Iran will “cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products,” according to the Energy Ministry in Moscow.
Richard Mallinson, an analyst at Energy Aspects in London, told Bloomberg. “There would be various practical limitations in terms of Iran’s current production capacity, geography and shipping logistics, as well as US sanctions.”
On the other hand, Lou Shaduk, managing director of equity trading at Stifel Nicolaus & Co. commented, “The market had been jittery. You have Polish Minister Sikorski talking about Russian forces poised to pressure or invade Ukraine, and that’s all the buyers needed today to go into hiding.”
Walter Hellwig, senior vice president at BB&T Wealth Management, opined that the decline in the S&P can be attributed to the rumor that Russia is preparing to invade Ukraine. He said the speculations “created additional technical difficulties with high-frequency trading.”
U.S. Markets
- Dow Jones Industrial Average (DJIA)- 16,429.47 (-0.84%)
- S&P 500- 1,920.21 (-0.97%)
- NASDAQ- 4,352.84 (-0.71%)
- Russell 2000- 1,121.45 (-0.30%)
European Markets
- EURO STOXX 50 Price EUR- 3,072.20 (+0.06%)
- FTSE 100 Index- 6,682.48 (+0.07%)
- Deutsche Borse AG German Stock Index DAX- 9,189.74 (+0.39%)
Asia-Pacific Markets
- Nikkei 225- 15,320.31 (-1.00%)
- Hong Kong Hang Seng Index- 24,648.26 (+0.20%)
- Shanghai Shenzhen CSI 300 Index- 2,369.35 (-0.26%)
Stocks in Focus
The stock price of Dollar General Corp. (NYSE:DG) increased more than 3% to $57.77 per share after the discount retailer indicated that it was considering a counter-bid for Family Dollar Stores, Inc. (NYSE:FDO).
Dollar Tree, Inc. (NASDAQ:DLTR) recently offered to acquire Family Dollar for $8.5 billion. The shares of Family Dollar climbed 2% to 77.25 per share while Dollar Tree’s stock dropped more than 2% to $54.76 per share due to the report.
The shares of Target Corporation (NYSE:TGT) declined more than 4% to %58.03 per share after the second largest retailer in the United States lowered its EPS outlook to $0.78 per share from its previous guidance of around $0.85 to $1.00 per share.
Motorola Solutions Inc (NYSE:MSI) fell more than 4% to $61.39 per share after reporting second-quarter earnings that missed the consensus estimates of Wall Street analysts. The data and telecommunications equipment provider posted non-GAAP earnings or $0.47 per share, lower than the $0.62 per share consensus estimate.
