Wall Street Slides as Geopolitics Comes Back into Focus

U.S. stocks moved between small gains and losses Tuesday as investors remained jittery amid tension between Ukraine and Russia and lingering concerns about sectarian wars in the Middle East.

Fears over geopolitical tensions and a potential U.S. rate hike pushed investors to scale back risk and increased cash levels to two-year high this month, according to a B. of A. Merrill Lynch fund-manager survey.

The S&P 500 (SPX) was flat at 1,936.60. The Dow Jones Industrial Average (DJI) was flat at 16,571.21. The Nasdaq Composite (RIXF) was 2 points lower at 4,398.85.

Geopolitical news took a center stage on Tuesday, undermining the optimism among global investors. Haven assets, such as U.S. Treasurys and gold were higher, while equities suffered.

Tensions between Ukraine and Russia escalated after Russian sent a convoy carrying aid for eastern Ukraine on Tuesday. Kiev has said it would not allow the vehicles to cross onto its territory, claiming the convoy was carrying military gear in the guise of aid. It's not clear whether the convoy has reached the border.

Meanwhile, clashes between ISIS and Kurdish forces continued in Iraq.

In economic news, the number of job openings in June rose to 4.67 in June, the most since early 2001, Bureau of Labor Statistics said. Federal Reserve Chairwoman Janet Yellen often cites the survey when she assesses the state of the labor market. Tuesday's report did not affect the stock market.

The National Federation of Independent Business's gauge of small businesses, released early Tuesday, showed sentiment edged higher in July. Small businesses account for the bulk of U.S. employment.

Stocks in focus

Shares of Kate Spade (KATE) soared 9% Tuesday, putting them on track to open at the highest level seen since April 2007, after the handbags and accessories maker reported better-than-expected second-quarter profit and sales.

Shares of Intercept Pharmaceutical (ICPT) leapt 30%, after the company late Monday issued positive data about an experimental treatment for liver disease.

Flowers Foods shares (FLO) stumbled 4.6% after disappointing quarterly results and yearly forecast from the bakery goods company, whose brands include Nature's Own.

Tesla Motors (TSLA) was off 0.7%. Consumer Reports magazine said its long-term ownership of the Tesla Model S electric car has been mostly positive, but there have been several reliability problems with the car, echoing a similar result from Edmunds.com.

Apple shares (AAPL) edged up 0.9%, following a Bloomberg report that production of new iPad models has begun. (Read more about the day's notable movers here: http://www.marketwatch.com/story/tesla-kate-spade-are-tuesdays-stocks-to-watch-2014-08-12.)

German stocks stumble, gold rises

Elsewhere, Germany's DAX 30 index fell after key ZEW economic-sentiment figures came in sharply lower than anticipated. Those expectations "were understandably low, given the data over the last few months and the deteriorating trade relationship between Europe and Russia," said Craig Erlam, market analyst at Alpari UK, in emailed comments.

Oil futures (CLU4) fell 0.7%, turning lower after the International Energy Agency said world oil demand will rise less than previously thought this year. The IEA also said there's ample supply of oil for the market.

Gold futures (GCZ4) gained $7.6 an ounce. Asian markets were mixed, with Japan's Nikkei Average up 0.2%.