Stocks finish in the red on rising tensions in Ukraine and Gaza

Monday, July 21, 2014 -

US stocks have finished lower as geopolitical worries weighed on sentiment during the first trading session of a busy week of corporate earnings reports.

The investment bankers pushed the stock market higher last Friday to allow options to expire to the benefit of option writers, in spite of growing geopolitical risks. But on Monday, the stock market retreated as investors began to focus on a stream of major earnings news, including early reports on Tuesday earnings from Coca-Cola, DuPont and McDonald’s.

The major indexes gradually advanced in afternoon trading to close modestly below the unchanged line. The Dow dipped 48 points (-0.3%) to 17,052, the Nasdaq edged down 7 points (-0.2%) at 4,425 and the S&P 500 slipped 5 points (-0.2%) to 1,974. The NYSE finished at -0.3% and the small cap Russell 2000 at -0.4%.

The lower close on Wall Street was partly due to geopolitical concerns amid the ongoing conflicts in both Ukraine and Gaza. Worries about further sanctions against Russia may build ongoing negative sentiment following the passenger plane shot down near the Ukraine-Russia border last Thursday.

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Small Cap Leader Nearing Bear Market

The broad market has been trading mostly sideways in July, hovering about support with the S&P 500 and NYSE still trading above their 50-day moving averages, whereas the small cap indexes such as the Russell 2000 index is now testing its 200-day moving average.

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The Russell 2000 has to hold this key support level, otherwise another sell off in the small cap stocks would cause . . .

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