Retailer Results and Russia Send Markets Down, Barely

Worsening tensions in Ukraine sent markets lower on Thursday, overshadowing an encouraging report on economic growth in the United States.

Ukraine's president declared that Russian forces had entered his country and called an emergency meeting of the nation's security council.

KEEPING SCORE In early trading on Wall Street, the Dow Jones industrial average fell 0.45 percent and the Standard & Poor's 500-stock index was down 0.57 percent. The Nasdaq composite index dropped 0.47 percent. European markets also fell. Germany's DAX lost 1.4 percent and in France, the CAC 40 fell 0.7 percent.

UKRAINE The mood in the markets turned increasingly negative during the European trading session after Ukraine's president called an emergency meeting of the nation's security council and canceled a foreign trip. President Petro Poroshenko summoned the council as the strategic southeastern Ukrainian town of Novoazovsk appeared firmly under the control of Russian-backed separatists. He declared that 'Russian forces have entered Ukraine,' as concerns grew about the opening of a new front in the conflict. Russian markets were hit particularly hard as fears increased that the country was escalating its role in the conflict, a move that could prompt the United States and European Union to impose additional sanctions on Russian businesses and individuals

GEOPOLITICAL UNCERTAINTY Not only stocks were being affected by concerns over Ukraine. As investors looked for secure assets, so-called safe-haven assets such as gold and United States Treasuries and German bunds were beneficiaries. An ounce of gold, for example, was up nearly $11, at $1,294. And bond prices rose, with the yield on the 10-year Treasury note falling to 2.32 percent.

ANALYST TAKE João Monteiro, an analyst at Valutrades, said risk aversion is 'creeping into play now with concerns that the situation could escalate between Russia and Ukraine,' and as a result 'we're seeing some classic defensive moves in markets with gold appreciating relatively rapidly.'

U.S. OUTLOOK While keeping one eye on developments in Ukraine, investors in the United States will be assessing revised data on economic growth for the April-June quarter. With the crucial nonfarm payrolls report for August due next Friday, the data expected in the next week could help cement market expectations on when the Federal Reserve will start raising interest rates.

ASIA'S DAY The mood in Asia wasn't too bright, with the Nikkei 225, the benchmark for the Tokyo Stock Exchange, closing down 0.5 percent. In Hong Kong, the Hang Seng fell 0.7 percent, while the Kospi in South Korea rose 0.04 percent. In Sydney, the S.&P./ASX 200 fell 0.5 percent. Markets in Thailand and the Philippines fell but Singapore shares rose.

JAPAN POLITICS The big event coming up in Asia is likely to be Prime Minister Shinzo Abe's cabinet changes next week. The appointments could signal the future of his so-called Abenomics policies, believed to have helped the yen weaken and prices to rise in Japan, curbing the negative spiral of deflation.

QANTAS FLIES Qantas Airways surged 7 percent in Sydney despite reporting a record loss that stemmed from tough domestic competition, a struggling long-haul business and a huge write-down of the value of its fleet. Investors welcomed confirmation that it would separate its domestic and troubled international businesses, possibly attracting new investors to the long-haul operation.

ENERGY, CURRENCIES Benchmark United States crude for October delivery was up 2 cents, at $93.90 a barrel, in electronic trading on the New York Mercantile Exchange. The euro was down 0.1 percent, at $1.3180. The dollar dropped to 103.72 yen from 103.91 yen.

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