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Overnight Markets: US stocks plunge as Ukraine-Russia tension escalates

by Himanshu Singh on Mar 04, 2014 at 02:38

Overnight Markets: US stocks plunge as Ukraine-Russia tension escalates

US stocks plunged on Monday, joining a global selloff in equities, as tensions in Ukraine and Russia escalated after Russian President Vladimir Putin asserted he had the right to invade his neighbour.

The Dow Jones industrial average declined 154 points or 0.94%, to end at 16,168. The S&P 500 slid 14 points or 0.74%, to finish at 1,846. The Nasdaq Composite dropped 31 points or 0.72%, to close at 4,277.

Concerned investors sought havens after Ukraine mobilised for war on Sunday and Washington threatened to isolate Russia economically.  The news overshadowed better-than-expected US data, including an index showing that factory activity rebounded from an eight-month low in February. The Commerce Department said consumer spending rose more than expected in January.

Russian stocks and bonds declined sharply and the central bank raised interest rates to defend the ruble. In US trading, the Market Vectors Russia ETF tracking companies from Gazprom OAO to OAO Lukoil dropped 6.9%.

Energy stocks could be the worst sufferers if relations between the US and Russia deteriorate further. Brent crude prices rose $2.13 to settle at $111.20 per barrel while US crude prices gained $2.33 to end at $104.92 a barrel.

Gold prices hit a four-month high as investors sought safe-haven assets, boosting gold stocks. US-traded AngloGold Ashanti (AU.N) shares gained 2.2%.

In corporate news, General Electric lost 1.4% and 3M dropped 1.9% to pace declines among large industrial shares.

Banks and other financial firms tumbled, with American Express sinking 1.4% and Visa dropping 2%.

Yandex NV, a US-listed online search engine operating in Russia, slumped 14%. Reynolds American Inc. rallied 4.8% after a report said the company might bid for Lorillard Inc.

Ford Motor Co. slid 1.2% after the carmaker said February light-vehicle sales fell 6.1%.

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