Stocks Sharply Lower on Crisis in Ukraine! Stocks on Wall Street were sharply lower at midday as a number of better than expected domestic economic reports were entirely overshadowed by the escalating conflict in Ukraine, a test firing of two missiles by North Korea, and a multi-month low in China’s manufacturing PMI.
In the U.S., personal income rose 0.3% in January, versus the expected increase of 0.2%, while consumer spending rose 0.4%, versus the expected increase of 0.1%. Markit’s PMI rose to 57.1 for the final February print, which was up from the preliminary February print of 52.7 and from January’s 56.7 reading. ISM’s manufacturing PMI for February came in at 53.2, which was better than the expected 52.3 reading and the prior month’s 51.3 figure. Construction spending edged up 0.1% in January, which was better than an expected 0.5% decline. In China, the final Markit/HSBC manufacturing Purchasing Managers’ Index for February fell for the third straight month to a seven-month low of 48.5. The official government manufacturing PMI fell to an eight-month low of 50.2, though the official non-manufacturing PMI rose to a three-month high of 55.0 in February. In Europe, Markit’s final euro zone PMI for February came in at 53.2, which was up from an earlier flash estimate of 53.0.
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Ford (F) shares fell 2% after the company reported its February sales in the U.S. were down over 6% from the prior year. General Motors (GM) reported a more modest 1% decline in sales from the prior year and its shares were down about 0.75% near midday following the monthly update… Shares of a number of Russian companies with stocks listed in New York fell sharply after Russia invaded Ukraine. Russian soldiers invaded the Ukrainian region of Crimea over the last few days, occupying key strategic locations in the area. The U.S. and other Western countries strongly condemned the move, and warned that Moscow would face consequences if it doesn’t back down. Among the companies with stocks listed in New York that are falling sharply in response to the situation are Yandex (YNDX), a Russian Internet search engine; QIWI (QIWI), which provides payment services in Russia; and VimpelCom (VIP) and Mobile TeleSystems (MBT), which are Russian mobile telecom companies.
Among the notable gainers was drug maker Dendreon (DNDN), which rose 14% after sales of its flagship Provenge cancer drug in the fourth quarter beat expectations. Also higher were shares of Lorillard (LO), which gained nearly 5% after participants in a chat moderated by Financial Times’ Alphaville suggested Reynolds American (RAI) has been working with bankers on a potential bid for its fellow cigarette maker. Among the noteworthy losers following its earnings report was Cooper Tire (CTB), which fell almost 9%. Also lower were shares of restaurant brand owner Darden (DRI), which slid more than 5% after the company estimated that lower sales and higher direct costs associated with more severe winter weather than last year adversely affected its third quarter earnings per share!