U.S. stocks(CME:ESM14) fluctuated and European equities declined as the crisis in Ukraine escalated. Emerging markets slumped with commodities as China’s money supply grew at the slowest pace on record.
The Standard & Poor’s 500 Index added 0.2 percent at 10:50 a.m. in New York, after jumping 0.7 percent earlier. The Nasdaq Composite Index(CME:NQM14) dropped 0.4 percent as technology shares slid. The Stoxx Europe 600 Index declined 0.5 percent. The MSCI Emerging Markets Index slid 1.1 percent, and a gauge of Chinese shares in Hong Kong lost the most in two months. Gold dropped 2 percent, sending the S&P GSCI gauge of 24 commodities down 0.2 percent. The Aussie depreciated against all of its 16 major peers. Italy’s 10-year bonds rose, pushing yields to a record low.
Ukraine unleashed an offensive to dislodge militants from towns in its eastern Donetsk region as Russia’s prime minister said the country risks civil war. China’s money supply grew less than forecast and the broadest measure of credit fell 19 percent from a year earlier in March before data that’s expected to show economic growth slowed in the first quarter. Coca-Cola Co. and Johnson & Johnson rallied after reporting earnings, offsetting data showing a decline in a gauge of New York-area manufacturing.
“Ukraine is always one of the factors that add to the headline risk,” Brian Peery, who helps oversee $4.8 billion for Novato, California-based Hennessy Funds, said in a phone interview. Peery said his firm has taken advantage of the recent selloff to add holdings in industrial companies, such as airlines. “The market is going to continue to climb the proverbial wall of worry. There is enough good economic news to support the market moving up higher in slower stages.”
Ukrainian units backed by armored personnel carriers blocked all approaches to the town of Slovyansk, Russia’s state- run RIA Novosti news service reported, citing an unidentified pro-Russian activist. Two militants were wounded when an airport in Kramatorsk was stormed, forcing the protesters to retreat, according to RIA.
The government in Kiev started the operation after fighting between its forces and pro-Russian separatists turned deadly this week. The U.S. and the European Union also deliberated deepening sanctions against Russia, which they blame for stoking the unrest, as Barack Obama and Russian President Vladimir Putin remained at odds over who was at fault.
Coca-Cola gained 3.4 percent as global volume sales increased. Johnson & Johnson climbed 1.3 percent as the company raised its forecast for the year. The two-week selloff in technology stocks resumed, as the Nasdaq Composite Index sank 0.4 percent.
“High-beta names are losing their early bid and that’s dragging on broader sentiment,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., which oversees $290 billion, said in an interview. “At the same time, headlines continue to suggest unrest in Ukraine, if not suggesting the country is on the brink of civil war. As of late, it’s either risk-on or risk-off. So far today it seems the latter is taking hold.”
--With assistance from Jonathan Burgos and Weiyi Lim in Singapore, Claudia Carpenter, Cecile Vannucci, David Goodman, Sofia Horta e Costa and Stephen Kirkland in London, Jonathan Morgan in Frankfurt and Nick Gentle in Hong Kong.
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