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Worsening tensions in Ukraine send stock indexes lower; Williams-Sonoma, other retailers sink

FILE - The New York Stock Exchange is shown, Tuesday, Aug. 9, 2011 file photo taken in New York. Global stock markets were muted Thursday Aug. 28, 2014 ahead of U.S. economic data and possible policy announcements from Japan.(AP Photo/Mark Lennihan, File)

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FILE - The New York Stock Exchange is shown, Tuesday, Aug. 9, 2011 file photo taken in New York. Global stock markets were muted Thursday Aug. 28, 2014 ahead of U.S. economic data and possible policy announcements from Japan.(AP Photo/Mark Lennihan, File)

U.S. stock indexes edged lower in afternoon trading Thursday, on track for their first loss this week. The slide began early on as the escalating conflict in Ukraine and a batch of disappointing earnings and profit outlooks from retailers eclipsed some good news on the U.S. economy.

KEEPING SCORE: The S&P 500 fell three points, or 0.2 per cent, to 1,997 as of 3:09 p.m. Eastern. The Dow Jones industrial average slid 41 points, or 0.2 per cent, to 17,080. The Nasdaq composite shed 11 points, or 0.2 per cent, to 4,558.

Trading was light ahead of the Labor Day holiday.

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.

RETAIL WOES: Abercrombie & Fitch fell 5.1 per cent 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 $41.78. Disappointing earnings also prompted investors to sell shares in Coty. The beauty products retailer declined 60 cents, or 3.3 per cent, to $17.41.

UGLY OUTLOOKS: Williams-Sonoma dropped 11.7 per cent after the seller of cookware and home furnishings issued a disappointing full-year profit outlook late Wednesday. The stock shed $8.77 to $66.12. Tilly's tumbled 4.1 per cent after the retailer forecast a difficult summer, saying customer traffic is down and merchandise discounts are cutting into its profit. The stock slid 35 cents to $8.17. Shares in Genesco also plunged after the seller of clothing, footwear and accessories issued a profit outlook that was shy of Wall Street's expectations. Genesco sank $6.49, or 7.3 per cent, to $82.18.

SECTOR VIEW: Seven of the 10 sectors in the S&P 500 fell, led by financial stocks. Utilities rose.

ECONOMIC REBOUND: The Commerce Department estimates that the U.S. economy grew at an annual rate of 4.2 per cent 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.

ENERGY: The price of oil rose for the third day in a row on evidence of a stronger U.S. economy. Benchmark U.S. crude rose 67 cents to close at $94.55 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 26 cents to close at $102.46 on the ICE Futures exchange in London.

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 per cent. In metals trading, gold climbed $7 to $1,290.40 an ounce, silver rose 13 cents to $19.53 an ounce and copper fell 5 cents to $3.13 a pound.

____

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

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