Stocks muddled amid Ukraine tension
Published 08/03/2014 | 00:32
One positive report on the US economy was not enough to make Wall Street investors more confident.
The stock market ended mixed yesterday after a day of muddled trading. Among the three main US stock indexes, one edged higher, one closed little changed and the other closed lower.
Investors focused on the tensions in Ukraine, where the region of Crimea was preparing for a referendum on whether to split away and become part of Russia.
It was enough of a reason to sell into the weekend and to offset optimism over a pick-up in hiring by US employers last month.
The Labour Department said companies created 175,000 jobs last month, easily topping economists' forecasts.
While encouraging, investors did not see the February report as part of a broader trend.
December and January job figures were mediocre, and the harsh winter weather has closed factories, cut into car sales, and caused existing-home sales to plummet for the last three months.
"People are hoping and praying that the recent slowness was weather-related, and while this report gave people a little bit of hope that is the case, it is still too early to tell," said Krishna Memani, chief investment officer of OppenheimerFunds.
The Standard & Poor's 500 index closed roughly flat, up a point, or 0.05%, to 1,878.04. The Dow Jones rose 30.83 points, or 0.2%, to 16,452.72 and the Nasdaq composite lost 15.90 points, or 0.4%, to 4,336.22.
On the whole, the overall tone of the market was slightly negative. Three stocks fell for every two that rose on the New York Stock Exchange. Of the 10 industry sectors in the S&P 500 index, six fell.
Biotechnology and health care stocks were among the biggest decliners. Biogen Idec fell roughly 4% and Amgen fell 2%.
The Nasdaq composite index is more heavily weighted to biotechnology and specialty pharmaceutical companies, which is part of the reason the index fell even though the Dow and S&P 500 rose.
As they have for much of the week, investors turned their attention overseas.
MPs in Russian-occupied Crimea unanimously declared they wanted to join Russia and would put the decision to voters in 10 days.
President Barack Obama and several other Western leaders have condemned the referendum.
Ukraine's economy is not large enough to cause serious damage to the global economy.
But the geopolitical tensions that Russia's occupation is creating between Russia, Europe, Ukraine and the US could potentially be destabilising for the region, investors say. In particular, trade between Europe and Russia could be severely affected.
Germany's DAX index fell 2% today, and is down nearly 4% this week. The Euro Stoxx 50 index, the European equivalent of the Dow Jones industrial average, fell 1.7% this week.
"Europe has a lot more to lose in these Russia-Ukraine tensions than the US," said Andres Garcia-Amaya, a global markets strategist with J.P Morgan Assets Management.
The geopolitical tensions could flare up at any point, he said, giving investors fewer reasons to hold positions through the weekend.
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