World Markets Pause on Escalating War of Words Between Russia and Europe

Nichole Harper
02 Sep, 2014
New York City

Stocks across Atlantic paused the advance after war of words escalated between Russian president Vladimir V Putin and European leaders ahead of NATO summit on Thursday.

[R]2:10 PM New York – Stocks across Atlantic paused the advance after war of words escalated between Russian president Vladimir V Putin and European leaders ahead of NATO summit on Thursday.[/R]

Stocks on Wall Street turned lower in afternoon after S&P 500 index registered the largest monthly increase in August since February.

Tollbooth Index gained 0.3% or 23.92 to 9,549.39, the index tracking companies with rising bargaining power advanced to record high.

S&P 500 index declined 7.51 to 1,995.86 and the Nasdaq Composite Index gained 1.13 to 4,581.40.

Investors turned cautious after war of words escalated between Russia and European leaders as Ukraine said Russia is increasing its presence on the border and nearly 16,000 troops are helping rebels advance.

Investors focused on geopolitical developments in Europe and tensions between Russia and Ukraine escalated. Ukraine alleged rebels are supported by as many as 16,000 Russian troops and Russian President Vladimir V. Putin supported the breakup of Ukraine and advanced the cause of independent statehood for Eastern Ukraine.

Also comments from Putin lifted already elevated tensions and Russian forces increased involvement in fighting and supporting rebels in Eastern Ukraine.

U.S. President Barack Obama is scheduled to travel to Estonia and offer a symbolic support before he arrives for the NATO meeting in Wales, U.K. this week.

The military alliance of 28 nations is expected to endorse a rapid response force of 4,000 troops to help Ukraine at a two-day meeting ending on Friday in Wales.

Russian president Putin reportedly said he could “take Kiev in two weeks” in response to a question posed by European Commission president Jose Barroso whether Russian troops had crossed into eastern Ukraine.

U.S. Movers

1-800-Flowers.com ((FLWS)) soared 11.6% or 60 cents to $5.75 after the florist and gift shop operator plans to acquire Harry & David Holdings Inc, gourmet food retailer, for about $142.5 million.

Dollar General Corp ((DG)) gained 56 cents to $64.55 after the discount retailer raised its bid for Family Dollar Stores Inc to $80 a share or $9.1 billion. The company also warned that it may take its appeal directly to shareholders if the revised offer was rejected by the management.

Family Dollar said the board will review revised offer of Dollar General but likely to stick with its deal with Dollar Tree.

Halliburton Company ((HAL)) rose 32 cents to $67.95 after the oilfield services provider agreed to a settlement of $1.1 billion with substantial majority of the plaintiffs’ class claims asserted against the company related to Macondo well incident in the Gulf of Mexico in April 2010.

The company agreed to pay in three installments over two years.

European Markets

In London trading, FTSE 100 index edged down 0.02% or 1.18 to 6,824.13 and in Frankfurt the DAX index gained 0.4% or 41.30 to 9,520.33.

In Paris, CAC 40 index rose 0.2% or 7.45 to 4,387.18.

Telefonica SA fell 0.6% to €11.99 after the Spain-based communication, media and entertainment service provider said it plans to sell its 14.8% stake in Telecom Italia SpA after a deal to acquire the Paris-based Vivendi''s Brazilian broadband unit GVT S.A.

Asian Markets

Market indexes in Tokyo advanced and the yen weakened for the second week in a row.

The Nikkei 225 Stock Average climbed 192 or 1.2% to 15,668.60 and the broader Topix index jumped 13.94 to 1,297.

The yen declined to close at 104.85 against one U.S. dollar.

In Mumbai trading, the Sensex Index jumped 151.84 or 0.6% to close at 27,019.39 The CNX Nifty advanced 55.35 to 8,083.05.

Bajaj Auto Ltd slid 0.2% to Rs 2,258.15 after the company said total sales in August climbed 8% from a year ago month to 336,840 units and motorcycles sales rose 2% to 284,302 units.

Sale of commercial vehicles surged 56% to 52,538 from 33,605 units a year ago. In the six month period to August sales of motorcycles jumped 3% to 1,427,001 units.

Total exports soared 21% to 175,127 units from 144,160 units a year earlier and vehicle maker estimated September sales at 4,00,000 units.

Hero Motocorp Ltd gained 1.5% to Rs 2,801.65 after the motorcycles maker reported total sales in August surged 21% to 558,609 units from a year ago month.

Tata Motors Limited slipped 0.7% to Rs 516.40 after the company’s total sales in August plunged 18% to 40,883 units and domestic sales of commercial and passenger vehicles tumbled 19% to 36,403 units from a year ago month.

Sales of passenger vehicles dropped 5% to 10,975 units and passenger cars fell 6% to 8,229 units and utility vehicles sales slipped 2% to 2,746 units. Light commercial vehicles sales plummeted 35% to 16,287 units.

Exports in August declined 8% to 4,480 units.