* Equities move lower in U.S., Europe
* Dollar drops to 6-1/2 month low versus currency basket
* Continued tension between Russia, Ukraine weighs on
(Updates to midday U.S. trading)
By Ryan Vlastelica
NEW YORK, May 6 Stock markets around the world
fell on Tuesday, pressured by ongoing geopolitical uncertainty,
which pushed investors to take profits with major indexes near
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 recent troughs and the yen and euro
U.S. stocks dropped, 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 the interior minister. 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 82.62
points, or 0.50 percent, at 16,447.93. The Standard & Poor's 500
Index was down 7.85 points, or 0.42 percent, at 1,876.81.
The Nasdaq Composite Index was down 21.55 points, or
0.52 percent, at 4,116.51.
The benchmark 10-year U.S. Treasury note was up
3/32, the yield at 2.6005 percent.
The euro rose 0.3 percent to $1.3921 against the
dollar while the yen rose 0.6 percent to 101.55. European
shares fell 0.3 percent, while the MSCI International ACWI Price
Index slipped 0.04 percent.
Gold dipped 0.2 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 1.3 percent for a third straight gain.
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 peripheral countries' lower-rated bonds also
remained at multi-year, and in some cases, all-time, lows.
Investors welcomed Portugal's plan to exit its bailout
and continued to bet on some future easing of
ECB monetary policy.
(Reporting by Ryan Vlastelica; Editing by Dan Grebler)