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Stocks Fall as Ukraine Tensions Escalate

Jeremy Glaser

U.S. Market
Stocks pared early gains this morning after reports of clashes between Ukrainian and Russian troops.

Industrial production rose a larger than expected 0.4% in July. A 10.1% rise in autos and auto parts was a major driver of the growth while lower utility output weighed production down.

The producer price index rose 0.1% in July from June levels, in line with expectations and lower than the 0.4% increase seen last month. Prices were up 0.2% excluding the volatile food, energy and trade categories.

Consumer sentiment fell in early August according the Reuters/University of Michigan survey. The reading of 79.2 was below the final July reading of 81.8 and expectations of 82.0. One-year inflation expectations rose to 3.4% from 3.3%.

At midday the Dow, S&P 500 and Nasdaq were down 0.7%, 0.6% and 0.5% respectively.

Stocks on the Move
Coke (KO) and Monster (MNST) announced a strategic partnership on Aug. 14 in which Coke will acquire a 16.7% stake in Monster and Monster's nonenergy drink portfolio for a net cash payment of $2.15 billion, and Monster will acquire Coke's energy drink portfolio. Under terms of the arrangement, Coke and Monster will expand the boundaries of their U.S. and Canada distribution partnership, with Coke becoming Monster's preferred global distribution partner and Monster becoming Coke's exclusive energy drink provider. Additionally, Coke has the option of increasing its stake to 25%, but can't take its stake above 25% during the next four years without approval from both boards. Monster Beverage shares soared over 25% on the news while Coke shares rose 1.3%.

Foreign Markets
European markets turned lower on escalating Ukraine tensions. In late trading, the FTSE 100 was up 0.1% while the Paris CAC and Germany’s DAX were down 0.7% and 1.4% respectively.

Asian shares were mostly higher on the day. The Nikkei 225 was unchanged, the Hang Seng gained 0.6% while the Shanghai Composite was 0.9% higher.