The Dow Jones Industrial Average dropped 70.48 points (0.42 percent) to 16,912.11.
The broad-based S&P 500 fell 8.96 (0.45 percent) to 1,969.95, while the tech-rich Nasdaq Composite Index gave up 2.21 (0.05 percent) at 4,442.70.
The EU, which had been more reluctant than the US to boost its sanctions against Russia, imposed new restrictions on the finance, defense and energy sectors to increase the economic cost to Russia for its intervention in Ukraine.
The US followed with new restrictions on Russia’s energy sector, arms industry and financial institutions.
Jack Ablin, chief investment officer at BMO Private Bank, attributed Tuesday’s drop in stocks entirely to the sanctions, which followed mixed corporate earnings reports.
“There’s always economic blowback” from sanctions, he said. “Whenever trade is restrained in any way, that creates dislocations and distortions that are generally negative.”
Dow component Pfizer finished 1.2 percent lower after reporting adjusted earnings of 58 cents per share, a penny above analyst expectations. Analysts noted some of the drugmaker’s most successful sellers during the quarter will suffer as key patents expire.
Fellow drugmaker Merck, also in the Dow, gained 1.1 percent after earnings of 85 cents per share bested expectations by four cents. Better sales of diabetes medication Januvia/Janumet, anti-cholesterol drug Zetia/Vytorin and other medicines helped offset the effect of patent expirations.
UPS fell 3.7 percent as the delivery company said full-year earnings would be $4.90-5.00 per share, down from the April forecast of $5.05-$5.30 per share. The company said it was increasing spending to boost capacity for the November-December peak holiday season.
Wal-Mart Stores dropped 0.4 percent after Goldman Sachs downgraded the giant retailer, concluding that the company’s current investment campaign to bolster its presence online and in the small-store market, while “understandable,” will harm earnings in the short run.
But Goldman upgraded Costco Wholesale in the same report, in part because of its strong international growth potential. Costco shares rose 1.5 percent.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.46 percent from 2.49 percent Monday, while the 30-year dropped to 3.22 percent from 3.26 percent. Bond prices and yields move inversely.
source: business.inquirer.net
