Wall Street Gripped By Geopolitical Fears

(RTTNews) - With U.S. announcing its intention to intervene militarily in Iraq, geopolitical concerns have precipitated, intensifying the risk aversion that was already wilting the global stocks markets. The major U.S. index futures point to a lower opening on Friday. Asian stocks closed notably lower earlier in the global trading day, while the European markets are also seeing weakness amid fears that the region's carefully built up economic momentum could be threatened by renewed geopolitical concerns surrounding Ukraine, Iraq and Palestine. Economic data of the day has largely been mixed. With not many market moving corporate and economic events scheduled for the day, all eyes are likely to be trained on the geopolitical tensions.

U.S. President Barack Obama announced late Thursday that he has authorized air strikes against Islamic militants in Iraq in a bid to protect U.S. personnel and the dropping of humanitarian aid to stranded people in the strife torn nation.

At 6:15 am ET, the Dow futures are receding 49 points, the S&P 500 futures are declining 7 points and the Nasdaq 100 futures are moving down 13.25 points.

U.S. stocks succumbed to geopolitical concerns on Thursday, ending the session moderately lower.

On the economic front, the Labor Department is scheduled to release its preliminary second quarter productivity & costs report at 8:30 am ET. Economists expect non-farm productivity to improve by 1.4 percent sequentially, while unit labor costs are expected to rise by 1.6 percent. The Commerce Department will release its wholesale inventories report for June at 10 am ET. The consensus estimate calls for a 0.7 percent month-over-month increase in wholesale inventories.

In corporate news, CSC (CSC) reported first quarter earnings and revenues that beat estimates and issued in line earnings guidance for 2015. CBS (CBS) reported second quarter adjusted earnings that came in above estimates. Allscripts' (MDRX) second quarter adjusted earnings were in line, while its revenues exceeded estimates.

Gap (GPS) said its July comparable store sales rose 2 percent compared to a 1 percent increase in the year-ago period. For the second quarter, the company expects earnings of 73-74 cents per share, which includes 5 cents per share gain on the sale of a building owned but not occupied by the company. The guidance was above estimates.

NVIDIA (NVDA) reported better than expected second quarter earnings and in line revenues. The company's third quarter revenue guidance was also in line. Monster Beverage (MNST) reported second quarter earnings that were ahead of expectations, while its revenues trailed expectations.

Stung by geopolitical concerns, especially after president Obama announced air strikes on Iraq, the Asian markets wilted, with the Japanese, South Korean, Australian and Indian markets seeing marked weakness.

The increase in risk aversion that gravitated investment towards safe haven assets such as the yen worked out negatively for stocks in Japan, as they retreated sharply. The Nikkei 225 average lost 454 points or 2.98 percent before closing at 14,778, its lowest level since May 30. Australia's All Ordinaries also languished below the unchanged line throughout the session, ending down 71.10 points or 1.29 percent at 5,430. Hong Kong's Hang Seng Index closed at 24,321, down 66.89 points or 0.27 percent, while China's Shanghai Composite bucked the downtrend with a 6.76 points or 0.31 percent advance to 2,194 in reaction to strong domestic trade data.

On the economic front, a report released by China's General Administration of Customs showed that China's trade surplus rose to a record $47.3 billion in July from $31.6 in June, as exports at more than the double the pace expected.

The Bank of Japan's Monetary Policy Board opted to keep its monetary policy stance unchanged. While the central bank maintained its commentary on the economy, inflation and the outlook largely unchanged, it pointed to the weakening of exports. Japan's Ministry of Finance reported that Japanese exports rose at a slower rate than imports, resulting in the widening of the nation's trade deficit to 537.1 billion yen.

European stocks opened lower amid the intensification of geopolitical worries and are currently notably lower.

In corporate news, German insurer Allianz higher second quarter net income. Franco-Belgian bank Dexia reported a wider net loss for its first half. U.K.'s TUI reported higher profits for its third quarter.

On the economic front, a report released by the German Federal Statistical Office showed that German exports rose 0.9 percent month-over-month in June and imports climbed 4.5 percent. The trade surplus fell to 16.3 billion euros in June from 18.8 billion in May.

Meanwhile, French statistical office INSEE reported that French industrial output rose 1.3 percent month-over-month in June, reversing some of the 2.3 percent drop in May. Manufacturing output was up 1.6 percent. Based on the results of a survey, the Bank of France said it expects the French economy to expand by 0.2 percent sequentially in the third quarter, flat with that of the second quarter growth. French business sentiment fell unexpectedly in July, according to the results of the central bank's survey. The business confidence index fell a point to 96 in June, while economists expected the index to have remained unchanged.