U.S. Markets Shrug Off Military Action in Iraq, European Indexes Ease

Nichole Harper
08 Aug, 2014
New York City

Stocks in New York opened higher and investors shrugged off flying bombs in Iraq. The latest American military involvement only highlighted growing humanitarian crisis but investors surmised U.S. economic fundamentals remain intact.

[R]12:40 PM New York – Stocks in New York opened higher and investors shrugged off flying bombs in Iraq. The latest American military involvement only highlighted growing humanitarian crisis but investors surmised U.S. economic fundamentals remain intact.[/R]

Market indexes opened higher as investors focused on earnings and shrugged off escalating military actions in the Middle East.

The latest American involvement was viewed as a sideshow and investors focused on domestic earnings announcements and possible actions from European Central Bank to revive lending in the euro zone.

Tollbooth Index gained 0.3% or 32.23 to 9,196.11.

S&P 500 index increased 7.96 or 0.4% to 1,917.55 and the Nasdaq Composite Index added 12.88 or 0.3% to 4,347.47.

U.S. Movers

The Gap Inc ((GPS)) increased 5.9% to $42.57 after the casual apparel retailer reported better than expected quarterly earnings.

Monster Beverage Corp ((MNST)) jumped 7% after the energy drink maker posted higher than expected results.

News Corp ((NWSA)) declined 4.2% after the diversified print publisher reported lower than expected fiscal fourth-quarter earnings on weak advertising revenues as customers continue to migrate away from print to digital platforms.

Nvdia Corp ((NVDA)) soared 8% after the graphic chip maker reported better than expected quarterly earnings.

Zynga Inc ((ZNGA)) dropped 7% to $2.71 after the online game maker reported second-quarter earnings at the low of end of the company’s guidance and the company lowered its full-year outlook.

European Markets

European markets continued to slide this week after bombs began flying over Iraq and tensions remained high in the Middle East. In addition, despite the conciliatory comments from Russian officials there are no signs of easing crisis in Ukraine.

In London trading, FTSE 100 index dropped 0.6% or 39.83 to 6,557.54 and in Frankfurt the DAX index declined 0.6% or 56.41 to 8,982.56.

In Paris, CAC 40 index slumped 0.3% or 14.14 to 4,135.69.

Allianz net climbed 11% to €1.8 billion on 10% increase of revenue and the latest period earnings were driven by lower cost in insurance operations but asset management business continued to suffer.

Banca Monte dei Paschi net loss widened to €179 million but revenue climbed 8%.

Italian luxury leather goods maker, Tod’s reported profit dropped 26% to €56 million on weak sales in the U.S. and Europe.

Asian Markets

Market indexes in Japan plunged 2.3% in Friday’s trading after geopolitical worries overshadowed domestic earnings and current account deficit was lower than expected.

Markets in Japan and Asia declined after the U.S. President Barack Obama ordered air strikes in Iraq on “humanitarian” grounds and prevent rebels from gaining more territory.

The Ministry of Finance reported current account deficit in June of 399.1 billion followed by 522.8 billion yen surplus in May.

The trade balance showed a deficit of 537.1 billion yen beating expectations a shortfall of 592.8 billion yen compared to 675.9 billion yen deficit in the last month.

Exports jumped 4.4% to 6.12 trillion yen while imports surged 13.9% to 6.652 trillion yen from a year earlier.

Meanwhile, overall bank lending in Japan jumped 2.3% in July from a year ago to 414.67 trillion yen, unchanged from the June.

The Nikkei 225 Stock Average plunged 454 or 2.9% to 14,778.37 and the broader Topix index dropped 29.86 or 2.4% to 1,228.26. The decline in indexes was the largest since May 7.

For the week, Nikkei 225 index plunged 4.8%, the largest weekly losses since April 11.

The yen closed at 101.69 against one U.S. dollar.

In Mumbai trading, the Sensex Index dropped 259.87 or 1% to close at 25,329.14 The CNX Nifty fell 22.80 to 7,649.25. For the week, Sensex slipped 0.6%.

State Bank of India slid 0.9% to Rs 2,415.25 after the largest bank reported net profit in the first-quarter rose 3.3% to Rs 3,349.08 crore and total revenue climbed 12.6% to Rs 40,739.21 crore.