By Barbara Kollmeyer and Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks pared opening losses on
Monday as investors assessed the impact of escalating war in Gaza
and possible sanctions against Russia.
The death toll inside Gaza mounted over the weekend as Israel
stepped up its ground war, while European policy makers debated
tougher sanctions against Russia in the wake of the downing of a
Malaysia Airlines passenger jet.
The S&P 500 (SPX) was 4.6 points, or 0.2%, lower at
1,973.57, with 9 of 10 sectors in the red. The Dow Jones Industrial
Average (DJI) shed 42 points, or 0.2%, to 17,058.19. The Nasdaq
Composite (RIXF) slipped by 5.6 points, or 0.1% at 4,426.46.
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action.
Quincy Krosby, market strategist at Prudential Financial, said
that investors do not react to geopolitical news unless they think
it would impact earnings potential of companies.
"There is a notion that markets are callous to horrendous events
in Gaza and Ukraine, but markets are not think-tanks. At the end of
the day, it's all about companies' abilities to earn a profit,"
Krosby said.
There are no economic events for Monday and a scant amount of
earnings, leaving investors to face down a weekend of rising global
tensions. On Sunday, Secretary of State John Kerry was caught on an
open microphone, ahead of interviews with Sunday talk shows,
criticizing Israeli's Gaza operation after the deadliest day of
fighting for both sides since the conflict began.
European threats of tougher sanctions against Russia weighed on
stocks in the region. In an interview on NBC's "Meet the Press",
Kerry said a "buildup of extraordinary circumstantial evidence" is
pointing to Russia as the source of the missile that shot down
Malaysia Airlines Flight 17 over Ukraine, killing 298 people.
International anger is growing over the inability of experts to
reach the crash site, as bodies languish in railcars without any
clear plan as to the destination. European leaders threatened
consequences against Russia if the Kremlin did not allow
investigators free and unhindered access to the crash site.
Also read: Why markets shrug off Malaysia Airlines plane crash,
Gaza and other geopolitifal flashpoints
European stocks fell on Monday. Russia's blue-chip MICEX index
dropped 2.7%, moving below 1,400. Should that hold, it would close
below that level for the first time since mid-May, according to
FactSet. Asian markets closed mixed.
Among commodities, gold (GCQ4) moved higher, while oil (CLQ4)
was also marginally up. Small caps' slump, Ukraine fears may hold
up market
Earnings reports
Hasbro Inc.(HAS) fell 3% after the toymaker posted an 8% rise in
revenue, but missed revenue estimates.
Shares of EMC Corp.(EMC) jumped 4.3% on reports Elliott
Management Corp. has taken a stake of more than $1 billion in the
data-storage giant and plans to push it toward a breakup.
GoPro Inc. (GPRO) shares rose 3.8% after J.P. Morgan initiated
coverage of the wearable camera maker with an overweight rating. At
least five banks have started coverage of the stock in recent days.
For more on notable movers, read Movers & Shakers column.
Results from Netflix Inc. (NFLX),Texas Instruments Inc. (TXN)
and Chipotle Mexican Grill Inc. will come after the close of
regular trading. Netflix, Chipotle, TI are Monday's stocks to
watch.
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