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Ukraine conflict weighs on markets; Retailers fall

By ALEX VEIGA

AP Business Writer Major stock indexes veered lower in midday trading Thursday as concern over the escalating conflict in Ukraine overshadowed encouraging reports on U.S. economic growth and jobs. Disappointing earnings and profit outlooks from several retailers also weighed on the market.

KEEPING SCORE: The S&P 500 fell four points, or 0.2 percent, to 1,995 as of 12:13 p.m. Eastern. The Dow Jones industrial average slid 56 points, or 0.3 percent, to 17,065. The Nasdaq composite shed 10 points, or 0.2 percent, to 4,559.

UKRAINE TENSIONS: Ukraine President Petro Poroshenko said Russian forces have entered his country and called an emergency meeting of the nation's security council. Security officials said two columns of tanks entered the country's southeast earlier in the day.

TEEN RETAIL ANGST: Abercrombie & Fitch sank 5.1 percent after the teen clothing company reported revenue that fell short of analysts' estimates. Tough competition and fickle teen tastes have dampened sales this year. The stock slid $2.23 to $41.77.

UGLY OUTLOOKS: Williams-Sonoma dropped 11 percent after the seller of cookware and home furnishings issued a disappointing full-year profit outlook late Wednesday. The stock shed $8.07 to $66.84. Tilly's tumbled 6 percent after the retailer forecast a difficult summer, saying customer traffic is down and merchandise discounts are cutting into its profit. The stock slid 50 cents to $8.02.

SECTOR VIEW: Nine of the 10 sectors in the S&P 500 fell, with industrials leading the slide. Utilities rose. TripAdvisor was the biggest decliner in the S&P 500, sliding $2.54, or 2.5 percent, to $99.24.

ECONOMIC REBOUND: The Commerce Department estimates that the U.S. economy grew at a better-than-expected annual rate of 4.2 percent in the April-June quarter, rebounding after a bleak start to the year. The assessment supports expectations that the second half of 2014 will prove far stronger than the first half.

HIRING BELLWETHER: The Labor Department said the number of Americans seeking unemployment benefits slipped last week to 298,000, a low level that signals employers are cutting fewer jobs and hiring is likely to remain strong.

INTEREST RATE IMPACT? While the situation in Ukraine is a factor, some investors are also worried that the surprisingly strong economic growth and unemployment benefit application data will spur the Federal Reserve to move up its timetable on lifting interest rates, said Doug Cote, chief market strategist at Voya Investment Management.

"The strong economic data is going to force the Fed's hand to start raising rates," Cote said.

Most economists have been anticipating that the Fed will begin raising its key interest rate by mid-2015.

DOGGED DOLLAR GENERAL: Despite having its nearly $9 billion offer to buy Family Dollar Stores rejected last week, Dollar General said it remains committed to acquiring its rival. Last week, Family Dollar rejected Dollar General's offer in favor of a slightly smaller one from rival Dollar Tree, saying a deal with Dollar General would be too hard to get approved by antitrust regulators. Dollar General added 95 cents, or 1.5 percent, to $64.65, while Family Dollar rose 7 cents to $79.87. Dollar Tree gained 45 cents to $54.

OVERSEAS MARKETS: In Europe, France's CAC 40 fell 0.7 percent, while Britain's FTSE 100 fell 0.4 percent. Germany's DAX fell 1.1 percent.

BONDS AND COMMODITIES: Bond prices rose as investors sought out lower-risk assets. The yield on the 10-year Treasury note fell to 2.34 percent. Benchmark U.S. crude rose 50 cents to $94.38 a barrel in New York. Gold climbed $7.90 to $1,291.30 an ounce.

____

Pan Pylas in London and Yuri Kageyama in Tokyo contributed to this report.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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