December 20, 2014
Wall Street ends down on heightened Russia concerns
US stocks ended lower today, continuing a recent streak of weakness as Russia's surprisingly harsh retaliatory measures in response to Western sanctions raised concerns about global growth.
In addition to Moscow's ban on imports of many Western foods, following sanctions imposed for Russia's support of rebels in eastern Ukraine, investors worried that the conflict between Russian and Ukraine is escalating, with the downing of a Ukrainian fighter jet. .
The declines briefly dragged the Dow below its 200-day moving average in afternoon trading. The S&P 500 is now nearly 4 percent below the record closing high it set last month
While the full extent of the sanctions are still unknown, escalating tensions in Russia could continue to spur selling in stocks, analysts said.
All but one of the S&P 500's industry sectors ended down on the day, backtracking from brief gains in the morning. Consumer staples shares, the bright spot of trading on Wednesday, slipped 0.8 percent today, while utilities shares posted the sole sector gains.
The Dow Jones industrial average fell 75.07 points, or 0.46 percent, to 16,368.27, the S&P 500 ended down 10.67 points, or 0.56 percent, to 1,909.57, and the Nasdaq Composite lost 20.09 points, or 0.46 percent, to 4,334.97.
Jobless claims reports lent optimism to the market in the morning as the four-week claims average fell to its lowest level since February 2006, suggesting labour market conditions are continuing to improve.
About 5.5 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the five-day average of 6.9 billion.
Concerns about Portugal's banking system and tensions between Western powers and Russia also pulled down European stock markets.
The European Central Bank kept its main interest rate at a record low 0.15 percent, but the decision had been widely expected by investors and did not move equity markets.
Lisbon's benchmark PSI-20 index closed down 2.3 percent, underperforming a 0.7 percent decline on the pan-European FTSEurofirst 300 index and a 1.2 percent fall on the euro zone's blue-chip Euro STOXX 50 index.
Traders said the Lisbon market had been hurt by fears over the state rescue of the Portuguese bank Banco Espirito Santo (BES), which has been hit by financial problems associated with its Espirito Santo founding family.
Investors are concerned that lenders who contribute to a bank recapitalisation fund, through which the state has injected 4.9 billion euros ($6.5 billion) to carve a healthy new bank out of BES, may end up paying a chunk of the rescue bill.
Meanwhile, Japan's Nikkei share average snapped a five-day losing streak today after Japan's massive Government Pension Investment Fund (GPIF) was planning to invest more in domestic stocks.
The Nikkei gained 0.5 percent to 15,232.37 points after falling earlier to 15,061.99, its lowest since June 30, on a stronger yen and geopolitical concerns.
The $1.24 trillion pension fund, the world's largest, plans to allocate over 20 percent of its funds to domestic stocks compared with a current 12 percent target as it aims to generate higher returns for the country's ageing population, sources said.
The broader Topix rose 0.6 percent to 1,258.12, and the new JPX-Nikkei Index 400 climbed 0.5 percent to 11,452.78.