NEW YORK: Major global stock markets fell and bond prices rallied on Monday as worries over conflict in the Gaza Strip and Ukraine raised uncertainty for investors and kept them away from riskier assets.
US stocks fell on Monday, though major indices ended well off their lows.
The safe-haven yen also inched up and gold prices rose above $1,300 an ounce as the market focused on increased turmoil in the Middle East and tensions following last week’s downing of a Malaysian jetliner over Ukraine.
Israeli jets, tanks and artillery continued to pound Gaza as the death toll from a two-week conflict topped 500. Reports that Ukrainian forces were moving into the eastern city of Donetsk added to concerns that the conflict in one of Europe’s biggest countries may escalate.
Shocks to the system from Ukraine and Israel’s ground invasion of Gaza come at a time when markets have been worried about economic growth on both sides of the Atlantic and digesting second-quarter earnings reports.
The United States and the EU last week announced further economic sanctions against Russian interests before the jet was shot down.
But Germany and other European Union members have taken a more cautious line on moves against Russia than the United States, mindful of the damage an exchange of sanctions with one of their main energy providers could do to Europe’s economy. The Bundesbank said on Monday the German economy probably stagnated in the second quarter.
The situations in Gaza and Ukraine “are both quite serious, but at this point unlikely to derail the US economy,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
The Dow Jones industrial average fell 48.45 points or 0.28 percent, to end unofficially at 17,051.73. The S&P 500 slipped 4.59 points or 0.23 percent, to finish unofficially at 1,973.63. The Nasdaq Composite dropped 7.44 points or 0.17 percent, to close unofficially at 4,424.70.
MSCI’s All-World Index was down 0.3 percent, while European stocks were down 0.5 percent.
The overseas headlines overshadowed some upbeat US earnings.
Shares of Halliburton Co rose 0.6 percent to $71.35 after the world’s No. 2 oilfield services provider reported a 20 percent increase in quarterly profit.
So far this reporting period, 68 percent of S&P 500 companies are beating Wall Street’s profit expectations, according to Thomson Reuters data. That is above the 63 percent average since 1994.
In the foreign exchange market, the greenback was a tad lower against the yen at 101.27 yen, while the dollar also slipped against the Swiss franc, last trading at 0.8982 franc. German 10-year yields fell to about 1.14 percent, within reach of a 2012 record of 1.126 percent.—Reuters
