Rising tensions between Russia and Ukraine helped push North American markets lower on Thursday, despite some strong earnings reports and indications the U.S. economy is rebounding.

Two columns of tanks and military vehicles rolled into southeastern Ukraine from Russia on Thursday morning and Ukrainian officials reported Russian troops massing at the border.

Geopolitical tensions in the Middle East also hung over market sentiment, with a group of peacekeepers on the Golan Heights at the Syria-Israeli border kidnapped by Syrian rebels.

In Toronto, the S&P/TSX composite index lost 44 points to 15,558 by the end of the day.

It had traded in record territory just two days ago, continuing this year's sharp run-up in stock prices. 

The Canadian dollar ended the day at 92.19 cents US, up 0.07 of a cent from Wednesday's close. 

Statistics Canada reported today that the current account deficit edged down $200 million to $11.9 billion. The decline reflected a slight increase in the deficit on trade in goods and services, which was more than offset by a lower deficit in investment income.

The loonie has strengthened over the last two days partly in the wake of the deal between Tim Hortons and Burger King.

Stock prices were down despite healthy earnings reports from CIBC and TD Bank. Both banks had been very close to 52-week highs before the results came out, but their stocks slipped today.The financials sector is still up 11 per cent year to date.

In the U.S., the Dow Jones industrial average slid 42 points to 17,078. The S&P 500 was down three points to 1,996 and the Nasdaq composite shed 12 points to 4,557.

There was nervousness that Russia was escalating its role in the Ukraine conflict, a move that could provoke the U.S. and European Union to impose further sanctions on Russian businesses and individuals and led to real turmoil in oil markets.

Revision in U.S. GDP figures

Stocks fell despite good news on the economic front, with new data from the Commerce Department showing gross domestic product grew by 4.2 per cent in the second quarter. That was revised upward from the original reading of four per cent and reverses a 2.1 per cent contraction in the economy in the first quarter, attributed to the bitter winter.

Other news also boosted hopes for the U.S. recovery, with the U.S. Labor Department said the number of Americans seeking unemployment benefits was lower last week at 298,000, a signal that employers are cutting fewer jobs.

Some investors are worried the improved economy and labour market data will prompt the Federal Reserve to move earlier on interest rates, said Doug Cote, chief market strategist at Voya Investment Management.

"The strong economic data is going to force the Fed's hand to start raising rates," Cote said.

Most economists anticipate that the Fed will begin raising its key interest rate by mid-2015.

Adam Posen, president of the Peterson Institute for International Economics, says he believes everyone worries too much about when interest rates will rise.

“Whenever the central banks decide to do it – and it’s a toss-up whether the Bank of England or the Federal Reserve goes first – the impact is going to be much smaller than people think,” he said in an interview with CBC’s The Exchange with Amanda Lang.

He said policy makers are wrestling now with the low levels of wage inflation – and the very small share of income that is going to workers instead of to capital.

"For the last several years, labour’s share has been at a low level compared to decades before. In the midst of a recession that’s not a surprise, but since we’ve had a two to three years of modest recovery, that is a surprise," Posen said.

If lower wages are a structural change built into the economy it will have a big impact on U.S. growth over the next few years, he said.