Russia-Ukraine crisis drags on U.S. stocks

A Wall Street sign in front of the A Wall Street sign in front of the New York Stock Exchange on April 22, 2010. Photo Credit: AP / Mark Lennihan

advertisement | advertise on newsday

Renewed concerns that tensions could flare up between Russian and Ukraine pushed U.S. stocks sharply lower Tuesday.

The market had been moderately lower all day, weighed down by a disappointing earnings forecast from retail giant Target and a report on China that showed the world's second-largest economy was slowing down, again.

The selling accelerated in afternoon trading. At one point, the Dow Jones industrial average fell nearly 200 points, but recovered some of those losses in the last 30 minutes of trading.

At the close on Wall Street, the Dow was down 139.8 points, about 0.8 percent, at 16,429.5. The Standard & Poor's 500 index lost 18.8 points, nearly 1 percent, to 1,920.2. The Nasdaq composite ended the day with a loss of 31.1 points, about 0.7 percent, at 4,352.8.

Several traders pointed to news reports of a buildup in Russian troops on the Ukraine border and comments from a Polish politician who reportedly said Russia was poised to invade or pressure Ukraine's eastern border as catalysts for the selling.

The developments came after the most recent round of sanctions were imposed on Russia by the U.S. and Europe last week. Russia called Tuesday for a meeting of the U.N. Security Council to discuss the situation in Ukraine.

The Ukraine-Russia tensions were "outweighing any good economic data" that investors had to work with Tuesday, said Tom di Galoma, a bond trader at ED&F Mann Capital.

advertisement | advertise on newsday

The tensions between Russia and Ukraine have been a headache for investors for months now. However the stakes are higher than before, investors say.

With winter a few months away, Europe's recovering economy remains dependent on Russian natural gas for heat and electricity. Germany imports nearly all its natural gas from Russia, and France also gets a significant amount of its energy needs from Russia.

"Europe's economy is far more exposed to Russia than the U.S.," said Randy Frederick, a managing director at Charles Schwab.

Tuesday's losses add to what has been a tough couple of weeks for U.S. markets. The S&P 500 fell 2.7 percent last week, its worst five-day performance since June 2012. While the market did recover some Monday, Tuesday's losses wiped out those gains, leaving the Dow and S&P 500 lower for the week.

You also may be interested in: