Stocks Fall Sharply On Ukraine Worries, Disappointing Earnings - U.S. Commentary

(RTTNews) - Partly offsetting the strong upward move seen over the past several sessions, stocks moved sharply lower during trading on Friday. Worries about the situation in Ukraine weighed on the markets along with some disappointing earnings news.

The major averages ended the day firmly in negative territory but off their lows for the session. The Dow tumbled 140.19 points or 0.9 percent to 16,361.46, the Nasdaq plunged 72.78 points or 1.8 percent to 4,075.56 and the S&P 500 slid 15.21 points or 0.8 percent to 1,863.40.

With the losses on the day, the major averages moved modestly lower for the week. The Nasdaq fell by 0.5 percent, while the Dow and the S&P 500 dipped by 0.3 percent and 0.1 percent, respectively.

The weakness on Wall Street came as traders kept an eye on the latest developments in Ukraine amid concerns about the outcome of escalating tensions.

Reports of Ukrainian forces killing several pro-Russian militants have raised the specter of a wider conflict, with Russian troops said to be conducting military exercises close to the border.

In remarks Thursday evening, U.S. Secretary of State John Kerry warned Russia that its window to change course is closing and reiterated that it faces further sanctions if it refuses to take steps to de-escalate the crisis.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "While U.S. and European stocks yesterday responded to the news of Russian military exercises, that should not have been a surprise as they amassed tens of thousands of troops on the Russian side of the Ukrainian border weeks ago."

"The problem now though is the rhetoric and tension seems to be taking on a new level of height and concern," he added.

While there were no major developments on Friday, worries about a possible Russian invasion over the weekend led traders to move out of riskier assets such as stocks.

A negative reaction to some of the latest earnings news also generated selling pressure, with auto giant Ford (F) posting a notable loss after reporting weaker than expected first quarter earnings.

Shares of Amazon (AMZN) also moved sharply lower after the online retailer reported first quarter earnings that matched analyst estimates but provided disappointing guidance.

On the other hand, Microsoft (MSFT) closed slightly higher after the software giant reported better than expected fiscal third quarter results.

Sector News

While most of the major sectors moved to the downside on the day, substantial weakness was visible among semiconductor stocks. The Philadelphia Semiconductor Index plummeted by 3.3 percent, giving back ground after trending higher over the past two weeks.

Freescale Semiconductor (FSL) helped lead the semiconductor sector lower, with the chipmaker tumbling by 13.8 percent despite reporting better than expected first quarter results.

Biotechnology stocks also came under considerable selling pressure, dragging the NYSE Arca Biotechnology Index down by 3.4 percent. Share of ImmunoGen (IMGN) fell sharply after the biotech company reported a wider than expected first quarter loss.

Significant weakness also emerged among networking stocks, as reflected by the 2.4 percent loss posted by the NYSE Arca Networking Index. Infinera (INFN) and Ciena (CIEN) turned in two of the sector's worst performances on the day.

Airline, electronic storage, housing, and retail stocks also saw notable weakness on the day, while gold stocks bucked the downtrend amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region once again turned in a mixed performance on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index tumbled by 1.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index dropped by 1.5 percent, the French CAC 40 Index slid by 0.8 percent and the U.K.'s FTSE 100 Index dipped by 0.3 percent.

In the bond market, treasuries moved modestly higher amid concerns about the escalating tensions in Ukraine. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slipped 2.2 basis points to 2.666 percent.

Looking Ahead

While any further developments in Ukraine could impact next week's trading, investors are also likely to keep a close eye on the Federal Reserve's latest monetary policy announcement next Wednesday as well as the monthly jobs report next Friday.

Reports on national manufacturing activity, pending home sales, consumer confidence, and personal income and spending may also attract some attention.

On the earnings front, Exxon Mobil (XOM), Bristol-Myers (BMY), Nokia (NOK), Sprint (S), eBay (EBAY), MetLife (MET), Clorox (CLX), Kellogg (K), MasterCard (MA), Kraft Foods (KRFT), and Chevron (CVX) are among the slew of companies due to report their quarterly results next week.