Stocks tumble on Ukraine worries
NEW YORK — U.S. stocks followed world markets lower Monday morning as investors worried about increased tensions between Russia and Ukraine.
The Dow fell more than 120 points, or about 0.7%. The S&P 500 slipped 0.6% in the early going, while the Nasdaq fell nearly 1%.
Investors were cautious following news that Russia has moved forward with military intervention in Ukraine. Ukraine’s new leaders have accused Russia of declaring war.
Stocks in Russia were taking the biggest hit. The Micex index was down more than 11%, while the Russia RTS index tumbled almost 13%. Investors seemed to be very concerned by threats of serious sanctions against Russia from the United States and Europe.
Russia’s central bank reacted by hiking interest rates, saying it wanted to maintain financial stability and inflation levels as market volatility increases.
All the major European stock markets fell sharply in afternoon trading, with Germany’s Dax dropping almost 3%. France’s CAC 40 off nearly 2.5% and London’s FTSE 100 down about 2%.
The Ukraine fears hit most Asian stock markets as well. Hong Kong’s Hang Seng index closed 1.5% lower and Tokyo’s Nikkei dropped 1.3%. Stocks in Shanghai and Shenzhen bucked the trend and moved higher.
Meanwhile, gold prices are rising by 2% to around $1,350 per ounce as investors seek safe-haven assets.
The price of oil is also up, with crude prices rising by 1.5% to nearly $104 per barrel.
“Russia’s involvement clearly magnifies the scope for contagion and increases the possibility that global energy prices will be affected both directly and indirectly,” wrote Stephanie Flanders, chief European market strategist for JPMorgan asset management in London.
In company news, Men’s Wearhouse said Monday that it has entered into merger talks with its rival retailer Jos. A. Bank.