US stocks fell amid a light calendar as investors monitored headlines out of Ukraine and Gaza, preferring to stay on the sidelines before earnings in the US turn up a notch. Geopolitical uncertainty crept under the cracks as undergoing investigations of the downed MH17 failed to relieve Russia of responsibility. Meanwhile, pressure is mounting for the Euro bloc to enforce tougher sanctions against Russia, promising to drive a deeper rift between the West and Russia. A mounting death toll in the Gaza strip further weighs on global sentiment, seeing to the rise of oil and gold prices, while equities sink.

Corporate news

In corporate news, better earnings from Halliburton and Allergan failed to break losses in equities. Halliburton closed mostly flat after reporting Q2 earnings which met expectations. Meanwhile, Allergan rose 2.3% after earnings came in ahead of expectations, while the company announced job cuts of 1,500 to fend off a hostile takeover from Valeant Pharmaceuticals. McDonald’s fell 1.5% ahead of its earnings release tonight, after its meat supplier was found to have sold expired chicken and beef to the fast food chain in China. Elsewhere, hedge fund Elliott Capital Management staged a corporate raid on data storage company EMC, sending its stock soaring by 5%. Elliot plans to break up the company and sell off its VMware unit. Overall, the S&P500 fell 0.2% and the Dow lost 0.3% overnight. This week likely holds the highlights of the earnings season with more than one third of Dow components and nearly 150 S&P500 companies reporting. Market leaders in the tech sector, Apple and Microsoft, both report tonight.

Currencies and commodities

In the currency markets, the dollar was mostly stronger against the majors due to safe-haven flows, in the absence of market data. The single currency continues to hover above the 1.35 levels, although these support levels could easily give way if officials in the eurozone were to decide to step up sanctions against Russia when they meet today. With the death of 193 Dutch nationals in the MH17 crash, European officials are facing mounting pressure to implement stricter sanctions, with resultant economic concerns. Officials will have to satisfy both the calls of the UK and US, while grappling with a reliance on Russian oil. Elsewhere, the pound fell against the dollar after home prices came in weaker than expected. In the commodity complex, US oil prices rose near three-week highs, with expectations that crude inventories would shrink due to the summer driving season. In Asia, the Jakarta composite made gains ahead of the Indonesian election results which place president elect ‘Jokowi’ as the forerunner.

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