Stocks Fluctuate, Despite Iraq News

By Dow Jones Business News, 
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By Matt Jarzemsky

U.S. stocks edged higher as investors shrugged off escalating American involvement in the Middle East.

The Dow Jones Industrial Average rose 17 points, or 0.1%, to 163384 morning trading, wavering between slim gains and losses earlier in the session.

The S&P 500 added two points, or 0.1%, to 1912. The Nasdaq Composite Index increased two points, or 0.1%, to 4337.

U.S. benchmarks outperformed a 0.5% decline in the Stoxx Europe 600. Japan's Nikkei Stock Average fell 3% for its biggest daily slide in nearly four months. A rally in safe-haven bonds pushed the yield on the 10-year Treasury note, which moves inversely to its price, down to 2.35%, the lowest level since June 2013, according to Tradeweb.

Geopolitical concerns returned to the fore, as U.S. jet fighters bombed Islamic State positions in Iraq on Friday, in an effort to halt extremists' advance in the country.

But headlines out of Russia also eased anxiety over the country's conflict in Ukraine. U.S. stock-index futures had spent much of their overnight trading session in the red, but rallied early Friday after Nikolai Patrushev, secretary of Russia'sSecurity Council, told state-run RIA Novosti news agency: "Russia will continue to make all efforts for a very fast de-escalation of tensions."

Moreover, traders said U.S. stock investors have been weighing whether to jump back in after a recent pullback. Thursday, the Dow average closed 4.5% below its July 16 record close. Some corners of the U.S. stock market that had been particularly beaten down lately outperformed on Friday. The Russell 2000 index of small companies' shares added 0.3%, trimming its decline year-to-date to 3.9%.

"The macro themes can definitely cause some near-term turbulence. It's keeping people from making aggressive decisions or being too over their skis. But people do want to own stocks," said David Seaburg, head of equity sales trading at brokerage Cowen & Co.

Mr. Seaburg saw an even balance of buyers and sellers Friday, he said, with long-term-oriented investors trimming winners, rotating from one stock to another within sectors and nibbling at stocks that had pulled back in some cases.

On the economic front, wholesale inventories rose 0.3% in June, less than economists expected. A measure of U.S. workers' productivity improved 2.5% in the second quarter, the Labor Department reported, topping the median forecast of economists in a Wall Street Journal poll. Unit labor costs, a gauge of inflationary pressure, rose a less-than-expected 0.6%.

In corporate news, Lululemon Athletica Inc. founder Dennis "Chip" Wilson agreed to sell half his stake in the company to a private-equity firm for $845 million. Shares rose 1.9%.

Zynga Inc. shares fell 5.5% after the videogame maker reported a wider second-quarter loss and lowered its financial outlook for the year.

Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com


  (END) Dow Jones Newswires
  08-08-141052ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


This article appears in: Market News Headlines


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