By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell on Tuesday with the
financials leading the losses on the S&P 500. Investors were
cautious as the crisis in Ukraine continued to flare up.
Premarket optimism stemming from deal news in the pharmaceutical
industry was short-lived.
The S&P 500 (SPX) was 6 points, or 0.3%, lower at 1,877.60.
Financials and consumer discretionary sector stocks led the losses.
The Dow Jones Industrial Average (DJI) fell 77 points, or 0.5%, to
16,452.91. The Nasdaq Composite (RIXF) dropped 17 points, or 0.3%,
to 4,119.33.
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action.
"Traders are being cautious, as they should be, because of the
situation between Ukraine and Russia," says Kim Caughey Forrest,
senior equity analyst at Fort Pitt Capital.
"Today's trading is very atypical, there is very little volume
and deal news, which usually a positive for markets is being
ignored," she added.
The sole economic report on Tuesday was data on the U.S. trade
deficit, which narrowed in March, as the nation boosted exports of
gas, oil and commercial aircraft, the Commerce Department said. The
deficit fell 3.6% to $40.4 billion, slightly above the consensus of
$40 billion.
Twitter tumbles, Office Depot surges on earnings
In deal news, Merck (MRK) agreed to sell its consumer-products
business, including the allergy-treatment Claritin and nasal
decongestant Afrin, to German drug maker Bayer AG (MRK) for $14.2
billion. Shares fell 1.9%.
Office Depot Inc. shares (ODP) surged 18% to $4.94, after the
electronics retailer raised its outlook for 2014 operating profit
and said it plans to close at least 400 U.S. stores by the end of
2016.
Shares of Athenahealth (ATHN) fell 12%, after David Einhorn of
Greenlight Capital said at a conference Monday that the
health-information technology firm is "overpriced" and "caught up
in a bubble."
American International Group Inc. (AIG) shares were hit, falling
2.8% after reporting a substantial fall in first-quarter
profits.
Discovery Communications, Inc. (DISCA) shares dropped 3% after
disappointing first-quarter results. The owner of Discovery Channel
and Animal Planet said profit edge down 0.4% as higher expenses cut
into revenues.
Twitter Inc. (TWTR) shares tumbled 10% as hundreds of millions
of shares held by insiders became available for sale in the open
market. The stock took a hit even after Twitter management sought
to reassure investors by announcing that major investors were not
planning to unload huge chunks of their shares.
DirecTV (DTV) shares rose 1.5% even as the company said
first-quarter earnings fell 19%. The company, however, continued to
boost its subscriber numbers, surpassing 38 million customers.
Quarterly results from media and entertainment conglomerate
Disney (DIS), upscale grocer Whole Foods (WFM) as well as
e-commerce and daily-deals company Groupon Inc. (GRPN) are due
after Wall Street's regular close.
Disney (DIS) is projected to report second-quarter earnings of
96 cents a share, according to a consensus survey by FactSet, while
Whole Foods is projected to report earnings of 41 cents a share in
the second quarter. Groupon Inc. is forecast to post a loss of 3
cents a share in the first quarter.
European stocks lower, Asian market closed
Ahead of Wall Street's open, European stocks reversed earlier
gains and moved lower.
On Tuesday, the Organization for Economic Cooperation and
Development said the European Central Bank should immediately cut
its benchmark interest rate, to end a period of too-low inflation
in the euro zone.
Asian stocks were slightly higher, with Australia up after the
country's central bank held interest rates steady. Markets in
Japan, South Korea and Hong Kong were closed.
In the commodities markets Tuesday, gold (GCM4) futures fell
slightly. Crude for June delivery (CLM4) gained slightly but still
remained below the $100 a barrel level. Meanwhile, the pound
(GBPUSD) bought $1.6980 and traded at levels not seen since at
least 2009 after strong U.K. services data.
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