|Wall Street suffers worst sell-off in a month, oil touches year’s high of US$104
Rising tensions over Russia's military advance into Ukraine pushed stock markets around the world sharply lower on Monday.
The Standard & Poor's 500 index dropped the most in a month, following stock markets in Europe and Asia lower, as Russia's military tightened its grip on the Crimea region. Investors sold stocks and bought less risky assets such as Treasurys and gold. The price of crude oil also rose on concern that Russian oil exports could be disrupted if Western countries impose sanctions on Moscow, AP reports.
It's the second time this year the U.S. stock market has been roiled by developments in emerging markets.
The S&P 500 index fell 13.72 points, or 0.7 percent, to 1,845.73, the biggest drop since February 3. The index was down as much as 25 points at one point before recouping some of the ground it lost.
The Dow Jones industrial average dropped 153.68 points, or 0.9 percent, to 16,168.03. The Nasdaq composite fell 30.82 points, or 0.7 percent, to 4,277.30.
European markets fell even more. Germany's DAX sank 3.4 percent and Russia's benchmark stock index plunged 12 percent.
“Europe gets a lot of energy supplies from Russia,'' said David Kelly, chief global strategist at JPMorgan funds. “So, Europe would be a lot more directly affected by a trade war with Russia than the United States would.''
As investors sold risky stocks, they bought safer assets such as gold and US government debt securities. The dollar and the Japanese yen also increased in value.
The price of gold rose US$28.70, or 2.2 percent, to US$1,350.30 an ounce, its biggest gain of the year. The yield on the 10-year Treasury note, which moves inversely to its price, fell to 2.60 percent from 2.64 percent on Friday.
The price of crude following warnings by Washington and other governments that Russia, a major oil exporter, might face sanctions after it seized control of Ukraine's Crimean Peninsula. Russia was the world's second-largest producer of oil in 2012, accounting for 12.6 percent of global supplies, according to the International Energy Agency.
The prices of crude oil climbed US$2.33, or 2.3 percent, to US$104.92 a barrel, its highest price of the year.
Russian stocks that trade in the US were also hit hard. Mechel, a mining company, fell 18 US cents, or 9.5 percent, to US$1.72; Phone company VimpelCom fell 51 US cents, or 5 percent, to US$9.65. Energy company LukOil fell US$3.20, or 5.9 percent, to US$51.20.