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Wall Street: Stocks drop this afternoon as Ukraine heats up

U.S. stocks fell in early afternoon trading today, sending the Standard & Poor’s 500 Index below 2,000, as violence in Ukraine and disappointing retail earnings overshadowed data showing the economy expanded more than estimated.

Signet Jewelers Ltd., which operates Zales and Kay Jewelers, climbed 6.7 percent after reporting earnings that beat estimates. Williams-Sonoma Inc. tumbled 11 percent after its third-quarter earnings forecast missed analysts’ estimates. Abercrombie & Fitch Co. declined 6 percent as second-quarter sales fell more than analysts had projected. Guess? Inc. sank 8.9 percent after the retailer cut its annual earnings forecast.

The S&P 500 dropped 0.1 percent to 1,998.31 at 1:58 p.m., paring an earlier decline of 0.5 percent. The Dow Jones industrial average slid 29.6 points, or 0.2 percent, to 17,092.41. The Nasdaq Composite Index retreated 0.2 percent.

“These geopolitical events tend to be transitory, where the market may drop over the short-term but then tends to recover pretty quickly,” Bob Landry, executive director and portfolio manager at San Antonio-based USAA Investment Management Co., said via phone. He helps manage $22.3 billion. “Some of the economic data and home sales could potentially moderate some of the losses this morning.”

The U.S. equity index has rebounded 4.6 percent from a three-month low on Aug. 7 on speculation the Federal Reserve will keep interest rates low as the economy strengthens. The S&P 500 closed above 2,000 for the first time on Aug. 26.

The U.S. economy expanded more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years. Gross domestic product rose at a 4.2 percent annualized rate, up from an initial estimate of 4 percent and following a first-quarter contraction, Commerce Department figures showed.

“If you look at unemployment claims that should suggest we’ll get a very nice healthy payroll number next Friday,” Wilmer Stith, a Baltimore-based money manager at Wilmington Trust Investment Managers, said via phone. “This patchwork of broader and deeper economic expansion is well under way in the United States.”

Russian President Vladimir Putin discussed in a phone call with Italian Prime Minister Matteo Renzi the need to halt the bloodshed in Ukraine, Putin’s office said in e-mailed statement. Ukrainian President Petro Poroshenko pledged to step up the country’s defenses against what he earlier called a “de facto” Russian incursion after separatists gained ground in intensified fighting.

The U.S. stock market is seeing the slowest trading in at least six years as investors leave for vacation before Labor Day. Volume has been below 5 billion shares over the past seven days, the longest streak in data compiled by Bloomberg going back to 2008.

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