* Equities move lower in U.S. and Europe
* Dollar drops to 6-1/2-month low versus currency basket
* Tension between Russia, Ukraine weighs on markets
(Updates prices to U.S. close)
By Ryan Vlastelica
NEW YORK, May 6 Stock markets around the world
fell on Tuesday, with U.S. shares extending declines in
afternoon trading as persistent worries over the instability in
Ukraine pushed investors to take profits with major indexes
still near record levels.
The U.S. dollar fell 0.47 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
On Wall Street, financial shares fell following
disappointing results from American International Group,
and a selloff at Twitter Inc weighed on tech shares.
Even so, the Dow and S&P 500 remained within striking distance
of record levels.
Investors kept an eye on the 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 129.53
points, or 0.78 percent, at 16,401.02. The Standard & Poor's 500
Index was down 16.94 points, or 0.90 percent, at
1,867.72. The Nasdaq Composite Index was down 57.30
points, or 1.38 percent, at 4,080.76.
The benchmark 10-year U.S. Treasury note was up
4/32 in price, with the yield at 2.5951 percent.
The euro rose 0.4 percent to $1.3930. The yen
rose 0.5 percent against the dollar to 101.63 yen.
European shares fell 0.3 percent, while the MSCI
International ACWI Price Index slipped 0.2
Gold dipped 0.2 percent following a sharp rally over
the previous two sessions. Wheat prices, which have been
tied to the situation between Russia and Ukraine, both of which
are big grain producers, rose for a third straight session, up
In Europe, the European Central Bank is expected to repeat
its concern about the impact of the strong euro on already-low
inflation when it meets on Thursday, though economists doubt the
ECB will cut record-low interest rates again.
Yields on peripheral countries' lower-rated bonds remained
at multi-year lows, 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.
(Editing by Dan Grebler and Leslie Adler)