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Overnight Markets: Wall Street falls on Iraq concerns

Overnight Markets: Wall Street falls on Iraq concerns

Wall Street declined on Thursday as escalating violence in Iraq sent oil to an eight-month high and after disappointing economic data on retail sales and jobless claims.

The Dow Jones industrial average fell 110 points or 0.65%, to end at 16,734. The S&P 500 slid 14 points or 0.71%, to 1,930. The Nasdaq Composite fell 34 points or 0.79%, to 4,298.

Hours after ethnic Kurdish forces took control of the oil hub of Kirkuk after the Shi'ite-led government's troops abandoned their posts, President Barack Obama said that he refused to rule out US action in Iraq against Sunni Islamist militants.

The stock market's losses quickly accelerated following Obama's comments, with industrials and consumer discretionary sectors leading the decline.

In macroeconomic news, retail sales rose 0.3% in May, half the growth rate that economists had forecast. Americans' new claims for unemployment benefits unexpectedly rose last week.

Energy shares ranked among the few gainers yesterday after oil prices hit nine-month highs on worries that escalating violence in Iraq could disrupt oil supplies from the major OPEC exporter.

Shares of major US airlines dropped for a second straight day as oil prices rallied. American Airlines Group Inc (AAL.O), the world's largest carrier, tumbled 4.9% while United Continental Holdings Inc (UAL.N) fell 5.9%.

Geron Corp (GERN.O) surged 21.2% on heavy volume after the US Food and Drug Administration lifted a partial clinical hold on a study testing its blood cancer drug.

Lululemon Athletica Inc (LULU.O) fell 15.9% on heavy volume. The athletic apparel retailer cut its full-year earnings and revenue outlook.

A bright spot was Restoration Hardware Holdings Inc (RH.N), which climbed 12.7% a day after the luxury home furnishings retailer's first-quarter results.

Intel Corp. jumped 3.8% in extended trading after boosting its full-year revenue target.

In Asia, shares declined on Friday in morning trade after US equities slumped and oil surged amid escalating violence in Iraq.

The MSCI Asia Pacific Index lost 0.6% to 144 as of 9:49 a.m. in Hong Kong. Japan’s Topix index fell 0.7% as the yen held three days of gains before the Bank of Japan ends a policy meeting today.

South Korea’s Kospi index dropped 1%. Australia’s S&P/ASX 200 Index declined 0.8% and New Zealand’s NZX 50 Index slipped 0.6%. Singapore’s Straits Times Index fell 0.2%, while Taiwan’s Taiex index lost 0.3%. Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index both retreated 0.1%.

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