MARKET SNAPSHOT: U.S. Stocks Turn South As Ukraine Conflict Escalates

By Anora Mahmudova and Carla Mozee, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market reversed gains and fell, as news of Russian troops fighting Ukrainian military pushed investors out of riskier assets and into Treasurys on Friday.

The 10-year Treasury note yield fell 6 basis points to 2.3%, while gold futures trimmed earlier losses. Friday's losses on the main benchmarks put a cap on weekly gains.

The S&P 500 (SPX) fell 4.3 points, or 0.2%, to 1,950.86. The Dow Jones Industrial Average (DJI) dropped 53 points, or 0.3%, to 16,659.70. The Nasdaq Composite (RIXF) was flat at 4,454.28.

Ukrainian forces destroyed part of a Russian military unit that was on Ukrainian soil, a Ukrainian military spokesperson said Friday, according to news reports. Russia's foreign ministry said Ukrainian forces engaged in intense fighting in Eastern Ukraine to stop humanitarian aid to the region.

The entanglement overshadowed more signs that the U.S. economy remains healthy and that company profits are increasing. Industrial production rose in July, thanks to a sizeable jump in car output, the Federal Reserve said Friday.

Meanwhile, U.S. producer prices inched up in July, a second consecutive month of gains, led by services such as transportation and warehousing, the government reported Friday. That is one of several recent inflation gauges that show price growth isn't running too hot for the Fed.

Investors shrugged off a preliminary August reading on the University of Michigan/Thomson Reuters consumer-sentiment index that showed its at the lowest level since November.

John De Clue, chief investment officer at U.S. Bank Wealth Management, said he isn't surprised that stocks have been so resilient in the face of geopolitical concerns.

"Second-quarter earnings have been better than many of us expected and the economy is growing. The fact that we are not seeing larger pullbacks mean that investors are not alarmed by the impact of geopolitical issues," De Clue said.

Stocks in focus

Monster Beverage (MNST) shares leapt to lead the S&P on Coca-Cola's (KO) move to acquire a 17% ownership stake in the energy drink company, as part of a long-term partnership deal. Coke will make a $2.15 billion cash payment and transfer its global energy drink business to Monster.

Applied Materials Inc. (AMAT) was among the biggest advancers in the S&P, after the chip-making equipment provider's quarterly sales and earnings report topped Wall Street expectations.

Achillion Pharmaceuticals (US-ACHN) rallied in heavy volume following positive results from a clinical trial related to sovaprevir, the company's experimental hepatitis C treatment.

SeaWorld Entertainment (SEAS) shares rallied after the company confirmed that it will upgrade its killer whale tanks, succumbing to public pressure from animal activists. Read more about the day's notable movers here.

In other markets, 10-year Treasury yields fell 6 basis points to 2.34%. Oil futures (CLU4) rose 1.2% and gold futures (GCZ4) trimmed losses to 0.7%. In Asia, the Hong Kong Hang Seng index finished at its best level in more than three years. European stocks trimmed gains after Ukraine headlines.

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