(Updates to U.S. markets close)
* Dow, S&P 500 and Nasdaq all down on Russia tensions
* Dollar off highs, euro down; U.S. bond yields rise after
* Emerging market stocks rise, gold near 5-week low
By Barani Krishnan
NEW YORK, March 26 U.S. stocks fell on
Wednesday, led by fresh selling in technology shares after the
West agreed to prepare possibly tougher sanctions to punish
Russia over Ukraine, while the dollar pared gains made on strong
U.S. economic data.
U.S. Treasury debt prices moved higher after the government
sold $35 billion in new five-year notes amid strong demand from
fund managers and other investors, while gold remained near
5-week lows on a lack of physical bullion buying.
After a summit with top EU officials, President Barack Obama
said the United States and the European Union agreed to prepare
possible tougher penalties for Russia, including the energy
sector, to make Europe less dependent on Russian gas.
"This could be a non-event if the market wasn't at the level
that it is now. Because we are still near record highs, this
kind of geopolitical news can make investors more nervous," said
Peter Cardillo, chief market economist at Rockwell Global
Capital in New York.
The Dow Jones industrial average ended down 98.89
points, or 0.60 percent, at 16,268.99. The Standard & Poor's 500
Index fell 13.06 points, or 0.70 percent, to 1,852.56.
The technology-heavy Nasdaq Composite Index lost 60.69
points, or 1.43 percent, to 4,173.58, a bottom not seen in six
Stocks in the S&P healthcare and telecom
sectors, which led a morning rally, sharply pared gains.
Among technology shares, Facebook closed down 7
percent at $60.38. The Nasdaq biotech index slid 2
percent and was down almost 5 percent for the week so far for
its worst week since mid-October.
"From a fundamental standpoint, people are not sure if
growth can be sustained with many continuing headwinds, i.e.,
the Russia-Ukraine rhetoric; off-again, on-again concerns about
China, and the approaching quarter-end profit-taking in biotech
and momentum stocks," said Adam Sarhan of Sarhan Capital in New
While China is a concern, some investors are also counting
on Beijing taking steps to bolster its economy. There is a
growing bet that China will launch stimulus measures as
economists expect the world's No. 2 economy to miss the
government growth target of 7.5 percent this year.
"Investors are betting on stimulus because Chinese
authorities have done everything they could to achieve the
target in the past," said Sho Aoyama, senior market analyst at
European stocks ended in positive territory for a
second day. London's FTSE finished flat while Germany's
DAX rose 1.2 percent and France's CAC gained
The MSCI emerging equities index climbed 1
percent, its biggest gain in almost three weeks, helped by a
recovery in Russian stocks and in Poland and Hungary
In the latest snapshot of the U.S. economy, orders for
durable goods rose more than expected in February, ending two
straight months of declines. Financial data firm Markit's
preliminary composite Purchasing Managers Index showed
private-sector economic activity accelerated in March at a
faster clip than in February as the services sector picked up.
The stronger U.S. data initially bolstered the dollar index
while the euro fell European Central Bank officials
ramped up efforts to talk down the currency.
ECB governing council member and Bundesbank chief Jens
Weidmann said negative interest rates were an option to temper
The euro traded lower for a second straight day at $1.3784
, not far from the three-week trough of $1.3749 hit on
Tuesday. It was also lower against the yen at 140.61.
The dollar index edged up just 0.1 percent, off an earlier
gain of as much as 0.3 percent.
U.S. Treasuries yields fell slightly after the auction. The
benchmark 10-year U.S. Treasury note was up 12/32, its yield at
Two- and five-year notes have been the worst performers
since Federal Reserve Chair Janet Yellen said last Wednesday
that the U.S. central bank could raise interest rates six months
after its current bond-buying program ends, suggesting a
potential rate hike as early as the spring of 2015.
In precious metals trading, spot gold was at
$1,303.60 an ounce after plumbing a 5-week bottom of $1,300.09.
(Additional reporting by Alistair Smout in London and Hideyuki
Sano in Tokyo; Editing by Larry King, Dan Grebler and Jan