U.S. stocks fell, after equities slipped to a two-month low yesterday, on concern the Ukraine crisis will escalate and as Sprint Corp. and Time Warner Inc. (TWX) tumbled on merger news.

Sprint slid 18 percent after a person with knowledge of the matter said it ended talks to acquire T-Mobile US Inc. Time Warner tumbled 12 percent after Rupert Murdoch’s 21st Century Fox Inc. withdrew its unsolicited takeover bid for the company. Groupon Inc. (GRPN) slumped 18 percent after its third-quarter earnings forecast trailed analysts’ estimates.

The Standard & Poor’s 500 Index retreated 0.3 percent to 1,914.35 at 9:31 a.m. in New York. The gauge dropped 1 percent yesterday to the lowest level since May.

“The obvious reason for weakness is Russia right now, and people are focusing on what that means for the economy going forward,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “Companies have had decent earnings, but outlooks are still conservative.”

NATO Deputy Secretary General Alexander Vershbow said that Russia has amassed about 20,000 troops along its border with eastern Ukraine. Russian President Vladimir Putin is showing no sign of backing down over Ukraine, and said his government has proposed retaliatory measures after the U.S. and the European Union tightened sanctions last week.

Record Level

The S&P 500 has lost more than 3.4 percent since reaching a record of 1,987.98 on July 24 and is about 70 points from erasing its gain for the year. The benchmark gauge tumbled 2.7 percent last week, the most since June 2012, as companies around the globe posted disappointing results, Argentina defaulted and Banco Espirito Santo SA was ordered to raise capital.

Stocks have also been weighed down by concerns that the improving economy may force the Federal Reserve to raise interest rates sooner than expected. Data last week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory.

The S&P 500 has soared 184 percent since the start of the bull market in March 2009, boosted by three rounds of central bank stimulus and better-than-forecast corporate earnings. The benchmark equity gauge has gone without a 10 percent correction since 2011. It trades at 17.4 times the reported earnings of its companies, after reaching the highest level since 2010 in June.

Keurig Green Mountain Inc. and Prudential Financial Inc. are among 25 S&P 500 companies reporting earnings today. About 75 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, data compiled by Bloomberg show.

Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent, according to analyst estimates compiled by Bloomberg.

 

Source: bloomberg

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