- Ukraine tensions limit risk appetite
- US trade deficit shrinks 3.6 per cent
- AIG drags financials lower
- Office Depot rockets on outlook, store closures
Dow Jones: -0.47%
S&P 500: -0.41%
US equity markets started Tuesday's session on the back foot as investors scaled back positions amid rising turmoil in Eastern Europe with indices trading near record highs.
Heightened tensions in Ukraine were keeping risk appetite in check after an army helicopter was shot down yesterday by pro-Russian activists near the city of Sloviansk. Deaths have been reported on both sides amid heavy fighting along the eastern border as Kiev continues its so-called 'anti-terrorist' operations.
The Dow Jones Industrial Average, Nasdaq and S&P 500
were all trading around 0.4-0.5% lower within the opening hour.
Financial stocks were among the worst performers after the bell with insurer American International Group reporting a 27% drop in first-quarter profits.
Meanwhile, the OECD dampened sentiment by cutting its forecast for global economic growth this year to 3.4% from 3.6%.
"As the Dow Jones and S&P 500 push towards the top of their ranges at 16,600 and 1,900 respectively, stocks are extra vulnerable to flare ups in Ukraine which is turning increasingly violent," said Market Analyst Jasper Lawler from CMC Markets.
"Any pullbacks should still be limited though as long as Russian troops don't cross the border," he said.
In economic data today, the US trade deficit shrank by 3.6% to $40.4bn in March, more or less in line with forecasts, while the previous month's balance was revised lower.
March's reduction was helped by a 2.2% rise in exports over the month, the biggest increase since June 2013, while imports rose by a lesser 1.7%.
Earnings in focus
AIG as lower early on after reporting that net income dropped to $1.6bn in the first quarter, from $2.2bn the year before. While the company beat forecasts, analysts showed concerns with weaker-than-expected earnings from property and casualty insurance.
Other financial stocks such as Citigroup, Goldman Sachs and JPMorgan were also trading in the red.
Shares in Office Depot jumped after the group lifted its profit guidance for the 2014 financial year and revealed plans to close more stores.
Other companies will be in focus as they release their quarterly results after the close, including Walt Disney, Groupon and Whole Foods.
Merck was lower after Bayer said it would acquire the former's consumer care division for $14.2bn.
In other markets, West Texas Intermediate futures were up 0.4% at $99.87 a barrel on the NYMEX.
The yield on a 10-year US Treasury was flat at 2.60%.