- S&P 500
pulls back from record high
- Russia steps up presence in Crimea region
- US condemns action in Russia
- US data comes in ahead of forecasts
Dow Jones: -0.95%
S&P 500: -0.84%
US stocks slipped on Monday morning in New York, tracking global equity indices lower as investors fled from riskier assets in the face of rising geopolitical tensions in Ukraine.
Despite US economic data coming in largely better than expected, the S&P 500 fell 0.8% in morning trade, pulling back from the record high of 1,859.53 reached on Friday following a 4.3% gain for the month of February. The Dow Jones Industrial was 1% lower, registering triple-digit losses, following a 3% increase last month.
"Risk aversion is rife in the markets on Monday, as the Ukraine crisis escalated further prompting investors to rebalance their portfolios away from stocks and towards commodities and other safe haven assets," said Market Analyst Craig Erlam from Alpari.
The crisis in Ukraine stepped up a gear over the weekend as Moscow stepped up its military presence in the Crimea region of the Black Sea. The move has been condemned by Russia's G8 partners who labelled it as a "violation of Ukraine's sovereignty".
US Secretary of State John Kerry, who is travelling to Ukraine today, released a statement on Saturday saying that unless Russia takes immediate and concrete steps to "de-escalate" tensions, "the effect on US-Russian relations and on Russia's international standing will be profound".
US data beats expectations
Markit's purchasing managers' index (PMI) for the US manufacturing sector rose to 57.1 in February from 53.7 in the month before. That was clearly above the preliminary or 'flash' estimate of 56.7.
According to Chris Williamson, Chief Economist at Markit, the final PMI reading signalled one of the largest monthly improvements in manufacturing for almost four years, reflecting a temporary rebound after supply chains and production had been disrupted by severe weather.
The ISM's more closely-watched manufacturing PMI rose from 51.3 to 53.2, ahead of the 52 forecast.
Personal income and spending rose by 0.3% and 0.4% month-on-month in January, according to the latest figures from the US Department of Commerce.
Construction spending rose by 0.1% in January to a seasonally adjusted annual rate of $943.1bn, following a 0.1% increase the month before. This was much better than the 0.5% decline expected by analysts.
Blue chips fall, precious metal miners rise
Heavyweight industrial stocks and financials were among the worst performers this morning with General Electric, Boeing, Goldman Sachs and Bank of America all trading in the red.
Companies exposed to Russia were out of favour, including Yandex, a US-listed online search engine operating in the country.
Gold mining stocks were faring a little better as the investors fled to safe-haven assets such as the precious metal amid the wider market sell-off. Newmont Mining, Freeport-McMoRan, Yamana Gold and Barrick Gold were also making decent gains.
Tyco International gained after it agreed to sell its fire and security unit in South Korea to Carlyle Group for about $1.93bn.