US STOCKS-Utilities boost Wall Street as bombs fly in Iraq

Fri Aug 8, 2014 11:21am EDT

Related Topics

* Benchmark Treasury yield at 14-month low

* Tekmira jumps as FDA modifies Ebola treatment status

* Indexes up: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.2 pct (Updates to morning trading)

By Rodrigo Campos

NEW YORK, Aug 8 (Reuters) - U.S. stocks rose on Friday, with high dividend-paying utility stocks leading gains and benchmark Treasury yields at a 14-month low, as the United States bombed Islamic State positions in Iraq.

Stock index futures had slumped overnight after President Barack Obama authorized relief supplies and air strikes on Iraq.

U.S. warplanes struck Iraq Friday for the first time since American troops pulled out in 2011, attacking Islamic militants after Obama said Washington must act to prevent a potential "genocide" of besieged minorities.

Markets had been on tenterhooks recently, with the S&P 500 set to close a second week of losses, after Russia banned the import of Western foods in retaliation for sanctions over Moscow's support of Ukrainian separatists.

A rebound in U.S. stock index futures before the market opened was influenced a report that Russia was aiming to de-escalate the conflict in Ukraine, some traders said. Such a turn of events would be beneficial to Europe's fragile economic recovery.

A global gauge of equities was negative earlier in the day but pared sharp losses, and safe-haven spot gold dipped after earlier hitting a three-week high. The yield in the 10-year Treasury note dipped below 2.35 percent for the first time since June 2013 before trading at 2.3754 - still a 14-month low.

"The Russian economy is in recession to begin with and they have a very symbiotic relationship with Europe," said Art Hogan, chief equity strategist at Wunderlich Securities in New York.

"If they take the rational decision to de-escalate, that would be a positive," he said, adding that technical support and shorts covering positions could have contributed to the rebound in futures.

The Dow Jones industrial average rose 56.26 points or 0.34 percent, to 16,424.53, the S&P 500 gained 6.38 points or 0.33 percent, to 1,915.95 and the Nasdaq Composite added 7.34 points or 0.17 percent, to 4,342.31.

The utilities sector was the best performer in the S&P 500 with a 0.9 percent advance. The sector's dividend yield stands at 3.876 percent, more than 100 basis points above the 10-year Treasury yield. Earlier this week, the index flirted with correction territory as it lost nearly 10 percent from a high set June 30.

U.S.-traded shares of Canada's Tekmira Pharmaceuticals jumped 25 percent to $17.83. The U.S. Food and Drug Administration modified its clinical hold status on Tekmira's experimental Ebola treatment to enable its potential use for infected people. The Ebola epidemic now constitutes an international health risk, the World Health Organization said.

Zynga shares fell 5.1 percent to $2.77 after it cut its 2014 forecast and said it had delayed several games including a revamped version of "Zynga Poker."

Nvidia Corp shares jumped 8.2 percent to $18.90 after the graphics chipmaker posted higher fiscal second-quarter earnings and gave a forecast for current-quarter revenue that exceeded Wall Street's estimates. (Editing by Bernadette Baum)

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Comments (1)
columbare1 wrote:
Deescalate or not Russia should be viewed with a jaundiced eye,as a country that is unstable ,and with a leader whose word cannot be trusted. In other words a pariah nation

Aug 08, 2014 1:16pm EDT  --  Report as abuse
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