Cautious Markets in New York and Europe After Tougher Russia Sanctions

Nichole Harper
29 Jul, 2014
New York City

Stocks on Wall Street turned after the U.S. and Europe imposed tougher and wider sanctions on Russia controlled banks and banned the sale of military and oil production equipment. U.S. consumer confidence index reached a seven-year high and home prices rose at a slower pace in May.

[R]12:20 PM New York, New York – Stocks on Wall Street turned after the U.S. and Europe imposed tougher and wider sanctions on Russia controlled banks and banned the sale of military and oil production equipment. U.S. consumer confidence index reached a seven-year high and home prices rose at a slower pace in May.[/R]

Stocks on Wall Street struggled to build on early rise after consumer confidence index jumped to a 7-year high and home price index showed a slower pace increase in May.

Rising tensions between Europe and Russia overshadowed market sentiment on both sides of Atlantic.

S&P 500 index decreased 1.90 to 1,977.01 and the Nasdaq Composite Index added 8.55 to 4,453.46.

The consumer confidence index tracked by the Conference Board increased to 90.9, the highest since October 2007, from a revised 86.4 in June.

A separate report showed home prices increased at a slower pace in a year to May. The S&P/Case-Shiller index of metropolitan residential properties in 20 cities increased 9.3% from a year ago month.

The index increased 10.8% in April and home prices declined for the first time in two years when compared to a previous month.

U.S. Movers

Windstream Corp ((WIN)) soared 13.4% after the company said it plans to spinoff some of its telecommunication network assets into a separately traded real estate investment trust.

Other telecom companies also surged on the speculation that more companies will use better tax structure to spinoff assets. Frontier Communication Corp soared 12% and CenturyLink Inc gained 3.5%.

Herbalife Ltd ((HLF)) plunged 11% after the nutrition supplements marketer reported adjusted earnings of $1.55 a share. The multi-level marketer also lowered annual sales estimate to a range between 8.5% and 10.5%, slower than 10% to 12% estimated in April.

Masco Corp ((MAS)) soared 7% after the maker of faucets and insulation reported second-quarter income increased to 32 cents, ahead of 28 cents estimates set by analysts.

European Markets

Investors were cautious in European markets trading after European and the U.S. imposed additional and tougher sanctions on Russia controlled companies.

The new measures imposed sanctions on Russian government controlled banks from accessing capital markets in the European Union and restricted sale of new arms to the military and virtually halt all oil production equipment sale.

The hardening of European stance is focused on weaning off Russian support to Ukrainian rebels and prevent a full scale invasion of Ukraine.

In London trading, FTSE 100 index gained 0.6% or 39.06 to 6,827.13 and in Frankfurt the DAX index climbed 0.7% or 67.69 to 9,665.86.

In Paris, CAC 40 index jumped 0.7% or 31.77 to 4,376.54.

On the corporate front, Deutsche Bank net plunged 29% to €238 million and revenue dropped 4% and UBS profit climbed 15% to 792 million francs.

GKN profit soared 106%. Klepierre and Corio signed a conditional agreement of €7.2 billion to create a retail property firm in Europe. Next Plc sales jumped 8%.

Asian Markets

Stocks in Tokyo gained and retail sales declined at a faster pace in June from May but were well below the sharp fall of 4.3% seen in April. Separate reports showed jobless rate increased in June from a year ago and household spending declined less than expected.

The Ministry of Economy, Trade and Industry said retail sales in June declined 0.6% to 11.35 trillion yen, following 0.4% increase in May. On a seasonally adjusted monthly basis retail sales slipped 0.4%, following 4.6% decline in May.

Sales from large retailers dropped 1.8% to 1.632 trillion yen from a year ago and slumped 1.2% in May but the decline was smaller compared to 6.7% fall in April.

The Ministry of Internal Affairs and Communications reported seasonally adjusted unemployment rate in June was unchanged from May at 3.7%. The participation rate was steady at 59.9%.

The Nikkei 225 Stock Average gained 88.67 or 0.6% to 15,618.07 and the broader Topix index rose 4.34 to 1,290.41.

Markets in India were closed to observe Eid al-Fitr holiday.