US stock markets contended with rising tensions over Ukraine and Iraq, yet US equities still finished in the black for the week following a big rally on Friday.
The Dow Jones Industrial Average rose 60.56 points (0.37 percent) to 16,553.93 over the week.
The broad-based S&P 500 rose 6.44 (0.33 percent) to 1,931.59, while the tech-rich NASDAQ Composite Index added 18.26 (0.42 percent) at 4,370.90.
Analysts said investors were increasingly cautious over the uncertainty in Ukraine after Russia barred imports of most food items from the US and EU in retaliation for Western sanctions, and stepped up its troop presence on Ukraine’s eastern border.
Violence in Iraq also returned to the forefront after the US ordered airstrikes and food and water drops to respond to dramatic victories by Islamic jihadists in northern Iraq.
“These hotspots have become hotter,” Cornerstone Wealth Management chief investment officer Alan Skrainka said.
“It seems as though geopolitical news has finally started to grab investors’ attention,” he said.
Still, US stocks on Friday enjoyed a solid rally that made up for the losses earlier in the week. Some analysts said the market had been oversold, and that the bounce-back fit into a pattern throughout the bull run of the past two years whenever problems have surfaced in Syria or Israel or Ukraine. These international conflicts have typically pushed US stocks lower at first, only to see a rebound once investors shifted their attention back to fundamentals in the absence of concrete examples of harm to the US economy.
Some analysts say US equities are well-situated compared with their European counterparts, given the differences in economic outlooks and the particulars of the current hotspots. Markets in Britain, France and Germany all suffered losses last week.
“The US appears to be more of a safe haven,” BMO Private Bank chief investment officer Jack Ablin said. Investors are trying to “cozy back up to the US where there is economic growth and where our economy is somewhat insulated from the geopolitical confrontations that are going on.”
Economic data remained mostly positive. The Institute for Supply Management’s purchasing manager index for the service sector gave the highest reading in nine years, pointing to continued momentum in growth.
In earnings news, Walt Disney Co and 21st Century Fox scored strong quarters, helped by their respective summer movie blockbusters Maleficent and the X-Men movie.
Fox also called off its campaign to acquire Time Warner after chief Rupert Murdoch concluded the price was too high. Murdoch’s firm had initially offered about US$80 billion in a swashbuckling move.
“The reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders,” Murdoch said in a statement.
Another deal that appeared to collapse was Sprint’s US$32 billion offer for T-Mobile, failing in the face of US regulatory opposition.
Next week’s economic calendar is relatively light, but includes releases on US retail sales and industrial production for last month. Retail giant Wal-Mart Stores also reports second-quarter earnings.