* U.S. stocks end down as overseas worries overshadow
* Donetsk fighting counters hopes of swift resolution of
* Safe-haven gold, bonds rally; oil ends higher
(Adds U.S. closing market prices)
By Caroline Valetkevitch
NEW YORK, July 21 Major global stock markets
fell and bond prices rallied on Monday as worries over conflicts
in the Gaza Strip and Ukraine raised uncertainty for investors
and kept them away from riskier assets.
Safe-haven gold prices also rose above $1,300 an ounce as
the market focused on increased turmoil in the Middle East and
tensions following last week's downing of a Malaysian jetliner
Israeli jets, tanks and artillery continued to pound Gaza as
the death toll from a two-week conflict topped 500. Reports that
Ukrainian forces were moving into the eastern city of Donetsk
added to concerns that the conflict in one of Europe's biggest
countries may escalate. <ID:nL6N0PV1C5]
Shocks to the system from Ukraine and Israel's ground
invasion of Gaza come at a time when markets have been worried
about economic growth on both sides of the Atlantic.
The United States and the EU last week announced further
economic sanctions against Russian interests before the jet was
But Germany and other European Union members have taken a
more cautious line on moves against Russia than the United
States, mindful of the damage an exchange of sanctions with one
of their main energy providers could do to Europe's economy. The
Bundesbank said on Monday the German economy probably stagnated
in the second quarter.
"We're certainly paying attention to the issues abroad, but
right now, they don't seem like the kind of events that will
have anything beyond a short-term impact," said John Chisholm,
chief investment officer at Acadian Asset Management in Boston.
"We expect these uncertainties to be reversed in two or three
The Dow Jones industrial average fell 48.45 points or
0.28 percent, to end at 17,051.73, the S&P 500 lost 4.59
points or 0.23 percent, to 1,973.63 and the Nasdaq Composite
dropped 7.44 points or 0.17 percent, to 4,424.70.
MSCI's All-World Index was down 0.2 percent,
while European stocks closed down 0.5 percent.
The overseas headlines overshadowed some upbeat U.S.
Shares of Halliburton Co rose 0.1 percent to $71
after the world's No. 2 oilfield services provider reported a 20
percent increase in quarterly profit.
So far this reporting period, 66 percent of S&P 500
companies are beating Wall Street's profit expectations,
according to Thomson Reuters data. That is above the 63 percent
average since 1994.
In the foreign exchange market, the U.S. dollar held steady
against major currencies. Demand for traditional safe-haven yen
and Swiss francs persisted but was not strong enough to push
them out of recent trading ranges against the dollar, as traders
have been assessing whether the violence in Gaza and Ukraine
would affect the global economy, analysts said.
The greenback was little changed against the yen at 101.36
yen with benchmark Treasury yields hovering at their
lowest in over seven weeks. The dollar slipped 0.1 percent
against the Swiss franc, last trading at 0.8978 franc.
The benchmark 10-year U.S. Treasury note was up
2/32 in price to yield 2.474 percent, while the 30-year Treasury
bond was up 17/32 in price, pushing the yield down to 3.264
percent. The long bond's yield fell as low as 3.249
percent, the lowest since June 2013.
"The buying in Treasuries is possibly geopolitical," said
Jonathan Rick, rate derivatives strategist at Credit Agricole in
New York. "We had the aggressive move on Thursday, then we had
the sell-off on Friday, so this might have been just a reversal
from that sell-off."
Investors were also bracing for an interest rate hike from
the Federal Reserve next year, with the gap between short- and
long-term interest rates, mainly the spread between yields of
2-year notes and 10-year bonds, contracting on Monday to its
narrowest since June last year.
U.S. oil prices climbed as the threat of escalating tension
between Russia and the West over the crisis in Ukraine mounted,
while August U.S. crude zoomed higher prior to its expiry. U.S.
crude was up $1.46 at $104.59, while Brent crude oil
was up 44 cents at $107.68.
Spot gold gained 0.2 percent at $1,312.50 an ounce.
(Additional reporting by Patrick Graham in London and Ryan
Vlastelica and Gertrude Chavez-Dreyfuss in New York; Editing by
Susan Fenton, Nick Zieminski and Dan Grebler)