Concern Over Russia Has Not Dissipated
US stocks fell early this afternoon, erasing gains that sent the Standard & Poor’s 500 Index to within three points of a record, on renewed concern the situation in Ukraine may escalate after President Barack Obama said the international order is being tested.
Wednesday, March 26, 2014 - 00:00
Global equity markets were up today as investors seemingly had moved on from Ukraine and have begun to focus on the potential for fresh stimulus from China. The dollar also rose strengthening US economic data. US Treasuries yields were steady ahead of a sale of $35 billion in new supply.
Russia and the West looked like they had drawn a tentative line under the Ukraine crisis after US President Barack Obama and his allies agreed to hold off on more damaging economic sanctions unless Moscow goes beyond the seizure of Crimea, which Russian President Vladimir Putin last week said he did not want to do. The development seemed to limit the odds that the biggest East-West conflict since the Cold War could escalate further, removing a potential headwind from markets. However, Obama, speaking in Brussels, warned of consequences of complacency in Ukraine and said Russia’s actions must be met with condemnation. While few US companies have direct exposure to the region, there had been worries about the fallout of prolonged tension. In lieu of all this, Russia's Micex Index rose gaining 1.9%.
In other economic news, American factories received fewer orders for machinery, communications gear and computers in February, signaling business investment is slowing after an unusually harsh winter put a damper on sales, data from the Commerce Department showed today. The S&P 500 rose 0.4% yesterday after data showed confidence among American consumers at a six-year high. Seven of the 10 main S&P 500 groups dropped. Raw-materials producers and technology shares fell the most, with each losing at least 0.8%.
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