* Aetna, other health insurers fall after Goldman note
* S&P 500 tests support as it dips below 100-day average
* Jobless claims fall unexpectedly in latest week
* Indexes off: Dow 0.3 pct, S&P 0.4 pct, Nasdaq 0.3 pct
(Recasts, updates prices, changes comment, adds Aetna, Harman)
By Rodrigo Campos
NEW YORK, Aug 7 U.S. stocks fell in choppy
trading on Thursday as a sanctions confrontation between Russia
and the West kept traders eager to cash any gains.
The S&P 500 had risen as much as 0.45 percent on the back of
some strong earnings and a surprise tick lower in applications
for unemployment insurance, before selling off to trade below
its 100-day moving average for a second consecutive session. It
has closed below that level just four times this year, the last
one in mid April.
Markets kept an eye on eastern Europe as Moscow imposed a
ban on imports of many Western foods, retaliating against
sanctions imposed for its support of rebels in eastern Ukraine
and the annexation of Crimea. Russia will ban various imports
from the United States, the European Union, Australia, Canada
and Norway in a measure that isolates its consumers from world
trade to a degree unseen since Soviet days.
"The Russian situation has gone from bad to worse," said
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds
Management in Menomonee Falls, Wisconsin, adding that "imposing
an import restriction on agricultural products will likely lead
to rapid inflation."
However, he said the recent volatility and pullback are not
foreshadowing a market correction.
"Earnings are robust, revenues are rising, and interest
rates are likely to go up gradually," Jacobsen said. "These are
not the conditions that create market corrections."
The sanctions by Moscow are seen as possibly hurting
European economies more than the United States due to closer
ties between Russia and Europe. Such a scenario could favor U.S.
equities and other assets as foreign cash looking for yield may
head towards the world's largest economy. The full extent of the
impact, however, is yet to be known.
"Geopolitical risks are heightened, are higher than they
were a few months ago. And some of them, like the situation in
Ukraine and Russia, will have a greater impact on the euro area
than they ... have on other parts of the world," European
Central Bank President Mario Draghi said after the ECB left
interest rates unchanged at record lows.
The Dow Jones industrial average fell 68.62 points or
0.42 percent, to 16,374.72, the S&P 500 lost 8.33 points
or 0.43 percent, to 1,911.91 and the Nasdaq Composite
dropped 11.15 points or 0.26 percent, to 4,343.90.
Health insurer stocks fell after Goldman Sachs downgraded
Aetna to neutral and cut earnings estimates on a number
of its larger peers. Aetna shares fell 3 percent to $75.97. The
S&P managed healthcare index fell 2.7 percent.
Shares of Harman International Industries fell 4.1
percent to $106.71 after the maker of JBL and Harman Kardon
audio systems forecast full-year profit below market estimates
as it spends more to boost production in lower-cost countries.
On the flip side, Twenty-First Century Fox was the
largest gainer on the S&P 500 after quarterly profit beat Wall
Street's expectations. Executives stressed they would not make a
new approach for Time Warner Inc after withdrawing an
$80-billion bid. Fox shares rose 5.5 percent to $34.09.
The number of Americans filing new claims for unemployment
benefits unexpectedly fell last week and the four-week claims
average, considered a better measure of labor market trends,
fell to its lowest since February 2006.
(Editing by Bernadette Baum and Nick Zieminski)