By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Wallgreen, Time Warner losses shave off nearly 2 points off
S&P 500
NEW YORK (MarketWatch) -- U.S. stocks edged higher on Wednesday,
erasing early losses as investors shrugged off worries about
geopolitical risks and downbeat European economic news.
Still, a lack of risk appetite globally pushed prices of
safe-haven assets higher. U.S. Treasurys rallied and gold futures
jumped 1.9% above $1,300 per troy ounce, while global equities
fell.
The S&P 500 (SPX) was up 1.8 points, or 0.1%, at 1,921.68.
The Dow Jones Industrial Average (DJI) added 12 points, or 0.1%, to
16,441. The Nasdaq Composite (RIXF) gained 4 points, or 0.1%, to
4,357.13.
Follow MarketWatch's live blog of today's stock-market
action.
Quincy Krosby, market strategist at Prudential Financial, said
this market has rewarded investors who bought the dips over the
past five years.
"August tends to be a weak months for stocks because of
seasonality. Most people around the world are on holidays, which
means lower volumes. In absence of economic and corporate news,
geopolitical headlines will be driving the markets," Krosby
said.
In today's sole economic news, the U.S. trade deficit shrank in
June, largely because imports of petroleum fell to the lowest level
since late 2010. However, investor reaction was muted.
Meanwhile, Dallas Federal Reserve President Richard Fisher said
after the close of Wall Street's session that the central bank may
need to hike rates sooner than expected, if data continues to be as
strong as the July Institute for Supply Management's service-sector
index. The index reached the highest level since Dec. 2005 on
Tuesday.
Also read: Here is when Fed officials forecast an interest-rate
hike
Groupon, Time Warner, Sprint on the move
Among individual companies, shares of Groupon (GRPN) slid 17%
after the daily-deals company posted disappointing results late
Tuesday. Groupon may not be bargain stock it seems
Meanwhile, Time Warner Inc. (TWX) shares sank 12% after 21st
Century Fox Inc. (NWSA) said late Tuesday that it was yanking its
proposal to buy the company.
Shares of Walgreen Co.(WAG) sank 14% after the drugstore chain
issued 2016 guidance well below Wall Street guidance. The drugstore
also said it will keep headquarters in the U.S., news that will
disappoint a group of investors trying to persuade the company to
relocate its headquarters to tax-friendly Switzerland.
Combined losses from Walgreen and Time Warner shaved off
approximately 2 points from the S&P 500.
Sprint (S) shares sank after it ended its pursuit of T-Mobile US
Inc. (TMUS) and would replace Chief Executive Dan Hesse with
billionaire entrepreneur Marcelo Claure, who is untested as a
wireless operator, The Wall Street Journal reported. Sprint shares
slid 18%. Read about more notable stock moves here.
European tension
News that Italy unexpectedly fell back into recession in the
second quarter weighed on European stock, which were down
sharply.
Stocks in Italy sank 3%, pushing down the broader Stoxx 600
index fell 1.4%. Other data showed German manufacturing orders
dropping a surprising 3.2% in June on an adjusted basis, as
geopolitical worries held back orders. The German DAX 30 index
dropped 1.5%.
Escalating tension between Russia and Ukraine resulted in a
selloff on Wall Street on Tuesday. On Wednesday, Poland's prime
minister said the risk of an invasion of Ukraine by Russia has
intensified.
In addition, Russian President Vladimir Putin told his
government to prepare retaliatory measures against sanctions by the
U.S. and Europe.
"With the Dow Jones brushing the 200-day moving average for the
first time since the end of January, there will be a lot of nervous
bulls out there," said Chris Beauchamp, market analyst at IG, in a
note. (Read more on why stocks are down in Wednesday's Need to Know
http://www.marketwatch.com/story/walgreen-to-buy-remaining-stake-in-alliance-boots-2014-08-06-61035145.)
Jitters carried over into Asia, where the Nikkei 225 index slid
1%. In other markets, Gold prices (GCU4) rallied, while oil (CLU4)
held steady ahead of inventory reports due later..
More must-reads from MarketWatch:
The U.S. pump-and-dump
How you'll know if it's time for a market crash
Preparing for a Fed change of heart
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