* Russian stock market, bonds and currency plunge
* Crude prices up more than 2 percent
* CBOE Volatility index VIX jumps more than 14 pct
* Dow down 1.1 pct; S&P 500 off 0.9 pct; Nasdaq off 0.9 pct
By Angela Moon
NEW YORK, March 3 U.S. stocks sold off on Monday
alongside other risky assets globally as Ukraine and Russia
prepared for possible war after Russian President Vladimir Putin
declared he had the right to invade his neighbor.
Ukraine mobilized for war on Sunday and Washington
threatened to isolate Russia economically as Moscow's biggest
confrontation with the West since the Cold War unfolded.
The S&P 500 had closed at a record high on Friday, and
profit-taking was expected on Wall Street due to the political
uncertainty. The index found some support when it fell to 1,840,
but broke below it after the first attempt. The S&P 500 extended
losses in early afternoon trading but then recovered slightly to
hover near the support level.
"It's too early to tell whether this would be an buying
opportunity because we need to see how this (tension between
Ukraine and Russia) plays out. It depends on how far this
escalates but I would suggest hedging before making any bets at
this point," said Randy Frederick, managing director of active
trading and derivatives for Charles Schwab in Austin, Texas.
The CBOE Volatility index VIX jumped more than 14
percent to 16.01, its biggest one-day jump in a month. The VIX,
which generally moves inversely to the S&P 500, is used as
hedges against further market decline.
Russian stocks and bonds fell sharply and the central bank
raised interest rates to defend the ruble. The
MICEX index of Moscow stocks tumbled 10.8 percent and the
dollar-denominated RTS stock index dropped 12 percent.
The market rout highlighted the damage the crisis could do
to Russia's vulnerable economy, making it harder to balance the
budget and potentially undermining business and public support
In U.S. trading, the Market Vectors Russia ETF fell
as much as 8.9 percent in heavy volume to a 4-1/2 year low of
$22.16. It was last down 5.6 percent at $23.05.
But the Direxion Daily Russia Bear 3x ETF, a
leveraged play on bad news in the fortunes of the nation's
listed stocks, jumped 17 percent to $20.31.
Energy stocks could lose if relations between the United
States and Russia deteriorate further.
"Anything that involves a boycott of Russian supplies, which
are very significant, could impact the energy sector
dramatically," said Rick Meckler, president of investment firm
LibertyView Capital Management in Jersey City, New Jersey.
"In situations like this, you see very quick reactions
reverse as people understand the scenario and how things play
The Dow Jones industrial average fell 181.55 points
or 1.11 percent, to 16,140.16, the S&P 500 lost 17.12
points or 0.92 percent, to 1,842.33 and the Nasdaq Composite
dropped 38.93 points or 0.9 percent, to 4,269.188.
Brent and U.S. crude prices rose more than 2
percent each. The S&P energy sector index, which opened
higher, was down 1 percent.
Gold prices hit a four-month high as investors sought
safe-haven assets, boosting gold stocks.
U.S.-traded AngloGold Ashanti shares gained 2.5 percent
Though the focus will likely remain on Ukraine, the economic
calendar was busy on Monday. U.S. factory activity rebounded
from an eight-month low in February and consumer spending rose
more than expected in January, suggesting the economy was
regaining some strength after a recent slowdown.