Traders work on the floor of the New York Stock Exchange on the morning of March 3, 2014 in New York City. The Dow Jones Industrial Average opened down amidst turmoil between Russia and Ukraine. (Photo by Andrew Burton/Getty Images)
(USA TODAY) -- Rattled by a global selloff and rising geopolitical risk due to the
escalating conflict between Russia and Ukraine, stocks on Wall Street
fell Monday amid a rise in investor risk aversion.
trading, the Dow Jones industrial average was down more than 150 points,
or 1.1%, while the Standard & Poor's 500 index was off 0.9% and the
Nasdaq composite 1% lower.
As is often the case when geopolitical
turbulence jumps and the threat of war looms, investors were flocking
to so-called safe-haven assets. Investors piled into U.S. government
bonds, driving the yield on the benchmark 10-year Treasury note down to
2.61%, from 2.64% Friday and 3.03% at the end of 2013.
aversion has returned as tensions mount in the Crimea," Barclays told
clients in a pre-market research note. "Safe havens continue to rally."
Similarly, gold prices rose, with an ounce fetching $1,345.50, up $23.90, or nearly 2% from Friday's close.
prices also rose as investors attempted to price in how potential
economic sanctions against Russia would impact energy supplies,
especially in Europe. A barrel of crude oil rose more than 2% higher
$104.77 in early trading.
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selloff in foreign bourses was more pronounced in Europe, whose closer
proximity to the latest shock epicenter caused investors to turn
cautious and pare back risk.
Russia's benchmark stock index was down as much as 11% Monday, its biggest loss since February 2009, according to Bloomberg.
across Europe bourses moved sharply lower. Britain's FTSE 100 index was
trading 1.5% lower while Germany's DAX index dropped 3.4%. France's CAC
40 was down 2.7%.
Tokyo's Nikkei 225 index dropped 1.3% to 14,652.23 on Monday in Japan and Hong Kong's Hang Seng declined 1.5% to 22,500.67.
markets are on edge after Russia's move into Ukraine's Russian-speaking
Crimea injected a major bout of uncertainty into markets and raised
fears of the conflict broadening. Over the weekend, Ukraine's prime
minister declared that his country is "on the brink of disaster" as
Russia's military advanced into the Crimea region and its troops blocked
key naval and military bases.
Still in a note to clients before
the U.S. stock market's opening bell, Citigroup strategist Tobias
Levkovich downplayed the risk to U.S. stocks, barring a "breakout of
Recent events in the Ukraine, he says, could unsettle euphoric markets but should not be that disruptive.
risks are always a concern but direct impact is needed to undermine
equities in a significant way," Levkovich wrote. "The history of
international conflicts having much impact on U.S. equities is very
limited and thus a much larger conflict would be needed to have
considerable negative impact."
The threat of all-out war between
Moscow and Kiev prompted Russia's central bank to temporarily increase
its key interest rate to 7% from 5.5%. The ruble has been under
sustained pressure in recent trading sessions and it hit a new low
against the dollar on Monday. Shares in Moscow plunged while wheat
prices - of which Ukraine is a major exporter - also fell sharply.
week brings an ample helping of economic reports, including reports on
how auto sales and manufacturing and non-manufacturing sectors did in
February along with how construction spending and how the trade deficit
fared in January. The most closely watched number, the February
employment report, comes Friday. The 6.6% unemployment rate is expected
to hold steady, with 150,000 jobs added for the month compared to
113,000 jobs created in January.