* Equities move lower in U.S., Europe
* Dollar drops to 6-1/2 month low versus currency basket
* Tension continues between Russia, Ukraine
(Updates to open of U.S. trading)
By Ryan Vlastelica
NEW YORK, May 6 Stock markets around the world
fell on Tuesday as investors found few reasons to keep pushing
shares higher, with many indexes near record levels and ongoing
The U.S. dollar fell 0.45 percent to a 6-1/2-month
low against a basket of currencies, while U.S. bond yields
struggled to pull out of their recent troughs and the yen and
euro both gained.
U.S. stocks dropped modestly, pressured by financial shares
following disappointing results from American International
Group. However, the Dow and S&P 500 remained within
striking distance of record levels.
Investors continued to watch the ongoing unrest in Ukraine,
where more than 30 pro-Russian separatists were killed in
fighting near the east Ukraine rebel stronghold of Slaviansk,
according to Interior Minister Arsen Avakov. Russia announced
plans to beef up its Black Sea warship fleet.
"Valuations are close to the ceiling and some people may be
uncomfortable because of that, especially given growing
nervousness over the geopolitical tensions," said Bernard
Baumohl, managing director and chief global economist at the
Economic Outlook Group in Princeton, New Jersey. "However, we
still have room to grow before alarm bells start going off."
The Dow Jones industrial average was down 79.98
points, or 0.48 percent, at 16,450.57. The Standard & Poor's 500
Index was down 7.71 points, or 0.41 percent, at 1,876.95.
The Nasdaq Composite Index was down 22.14 points, or
0.54 percent, at 4,115.91.
The benchmark 10-year U.S. Treasury note was up
3/32, the yield at 2.5987 percent.
The euro rose 0.4 percent to $1.3931 against the
dollar while the yen rose 0.5 percent to 101.50. European
shares fell 0.3 percent, while the MSCI International ACWI Price
Index slipped 0.1 percent.
Gold dipped 0.1 percent, though prices were supported
by the Ukraine tension. Wheat prices - which have been tied
to the situation between Russia and Ukraine, both of which are
big grain producers- rose 0.6 percent for a third straight daily
In Europe, the European Central Bank is expected to repeat
its concern about the strong euro's impact on already-low
inflation when it meets on Thursday. But economists doubt the
ECB will cut its record-low interest rates again.
Yields on the peripheral countries' lower-rated bonds also
remained at multi-year, and in some cases, all-time, lows.
Investors welcomed Portugal's plan to exit from its bailout
and continued to bet on some future easing of
ECB monetary policy.
(Reportoing by Ryan vlastelica; Editing by Dan Grebler)