The escalating conflict in Ukraine combined with disappointing earnings and profit outlooks from several retailers dragged stocks lower Thursday afternoon, eclipsing some good news on the U.S. economy. Trading was light ahead of the Labor Day holiday weekend.
KEEPING SCORE: The S&P 500 fell two points, or 0.1 percent, to 1,997 as of 1:07 p.m. Eastern. The Dow Jones industrial average slid 34 points, or 0.2 percent, to 17,087. The Nasdaq composite shed eight points, or 0.2 percent, to 4,561.
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 fell 3.8 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 $1.63 to $42.37.
UGLY OUTLOOKS: Williams-Sonoma dropped 11.2 percent after the seller of cookware and home furnishings issued a disappointing full-year profit outlook late Wednesday. The stock shed $8.39 to $66.50. Tilly's tumbled 6.3 percent after the retailer forecast a difficult summer, saying customer traffic is down and merchandise discounts are cutting into its profit. The stock slid 54 cents to $7.98.
SECTOR VIEW: Seven of the 10 sectors in the S&P 500 fell, with financials leading the slide. Utilities rose. TripAdvisor was the biggest decliner in the S&P 500, sliding $2.88, or 2.8 percent, to $98.90.
ECONOMIC REBOUND: The Commerce Department estimates that the U.S. economy grew at an annual rate of 4.2 percent in the April-June quarter, better than previously thought. 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 $1.01, or 1.6 percent, to $64.71, while Family Dollar rose 10 cents to $79.90. Dollar Tree gained 33 cents to $53.89.
BONDS AND COMMODITIES: Bond prices rose as investors sought out lower-risk assets. The yield on the 10-year Treasury note fell to 2.33 percent. Benchmark U.S. crude rose 66 cents to $94.54 a barrel in New York. Gold climbed $7.30 to $1,290.70 an ounce.