Global stocks slide as tensions build in Ukraine


By STEVE ROTHWELL

Associated Press

Rising tensions over Russia’s military advance into Ukraine pushed stock markets around the world sharply lower on Monday.

The Standard & Poor’s 500 index dropped the most in a month, following stock markets in Europe and Asia lower, as Russia’s military tightened its grip on the Crimea region. Investors sold stocks and bought less risky assets such as Treasurys and gold. The price of crude oil also rose on concern that Russian oil exports could be disrupted if Western countries impose sanctions on Moscow.

It’s the second time this year the U.S. stock market has been roiled by developments in emerging markets. Stocks slipped in January as investors worried about slowing growth in China and other emerging economies. Now a showdown in Ukraine has grabbed investors’ attention and stoked fears of a tit-for-tat campaign of economic sanctions between Russia and Western powers.

“Financial markets are doing exactly would you would expect them to,” said Phil Orlando, chief equity market strategist at Federated Investors. “You have no idea what is going to happen and how this is going to play out.”

The S&P 500 index fell 13.72 points, or 0.7 percent, to 1,845.73, the biggest drop since Feb. 3. The index was down as much as 25 points at one point before recouping some of the ground it lost.

The Dow Jones industrial average dropped 153.68 points, or 0.9 percent, to 16,168.03. The Nasdaq composite fell 30.82 points, or 0.7 percent, to 4,277.30.

European markets fell even more. Germany’s DAX sank 3.4 percent and Russia’s benchmark stock index plunged 12 percent.

“Europe gets a lot of energy supplies from Russia,” said David Kelly, chief global strategist at JPMorgan funds. “So, Europe would be a lot more directly affected by a trade war with Russia than the United States would.”

Kelly says that the most likely scenario is that Russia and Western powers, including the U.S., will reach a compromise relatively quickly. That would send stock prices higher.

As investors sold risky stocks, they bought safer assets such as gold and U.S. government debt securities. The dollar and the Japanese yen also increased in value.

The price of gold rose $28.70, or 2.2 percent, to $1,350.30 an ounce, its biggest gain of the year. The yield on the 10-year Treasury note, which moves inversely to its price, fell to 2.60 percent from 2.64 percent on Friday.


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