Global equity markets retreated Friday afternoon, erasing early gains following reports of Russian military movements inside Ukraine spooked risk-adverse investors, sending them into safety assets such as government bonds and precious metals.
Early advances in equities tied to market friendly economic data as well as an apparent calm in geo-political tensions. But those gains were compromised amid reports that Russia was sending armored vehicles into Ukraine within its humanitarian convoys, prompting fears of a "Trojan Horse" plot by Russia to get troops and weapons across the border.
Data on the economy was mixed today, with inflation remaining subdued but consumer confidence declining. Producer prices rose only 0.1% in July, meeting expectations, and falling from an unrevised 0.4% gain the previous month. Excluding the food and fuel, the producer price index rose an as-expected 0.2% last month and follows a downward revision in June to a 0.1% rise.
Manufacturing activity in the New York Federal Reserve district slowed this month, with the business conditions index dropping to 14.7 from 25.6 the month prior. Wall Street was expecting a more modest decline to 20.0. However, the future conditions index rose to a 2.5 year high of 46.8.
Meanwhile, industrial production rose to a 7-year high of 79.2 in July, with capacity utilization rising 0.4%, beating estimates for a 0.3% gain.
But market-friendly manufacturing data was offset by a deterioration in consumer confidence. The Reuters/University of Michigan consumer sentiment survey for August dropped to a nine-month low of 79.2 from July's final read of 81.8. Wall Street was expecting an improvement in August to 82.3.
As headlines from Eastern Europe trickled into the financial markets, European equities gave back their overnight gains and closed in the red. Overseas markets were buoyed last night by an apparent calm in tensions between Russia and Ukraine, as well as the decision by Iraqi Prime Minister al-Malicki to resign and avert a conflict with the West, offsetting lackluster UK GDP.
Crude oil was up $1.04 to $96.62 per barrel. Natural gas was down $0.13 to $3.80 per 1 million BTU. Gold was down $9.70 to $1,305.90 an ounce, while silver was down $0.25 to $19.67 an ounce. Copper was up $0.01 to $3.12 per pound.
Among energy ETFs, the United States Oil Fund was up 0.58% to $35.32 with the United States Natural Gas Fund was down 3.07% to $20.78. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 1.21% to 26.88 while SPDR Gold Shares were down 0.60% to $125.56. The iShares Silver Trust was down 1.10% to $18.89.
Here's where the U.S. markets stand at mid-day:
NYSE Composite Index down 55.23 (-0.51%) to 10,747.40
Dow Jones Industrial Average down 80.92 (-0.48%) to 16,632.66
S&P 500 down 5.75 (-0.29%) to 1,949.43
Nasdaq Composite Index down 12.03 (-0.27%) to 4,440.97
Nikkei 225 Index up 0.02%
Hang Seng Index up 0.62%
Shanghai China Composite Index up 0.92%
FTSE 100 Index up 0.06%
CAC 40 down 0.74%
DAX down 1.44%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 0.92%
NYSE Financial Sector Index down 0.70%
NYSE Healthcare Sector Index down 0.74%
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