* Indexes cut gains, fall to session lows
* Ukraine engaged Russia armored column
* Dow down 0.4 pct, S&P down 0.3 pct, Nasdaq flat
(Updates with latest news from Ukraine)
By Ryan Vlastelica
NEW YORK, Aug 15 U.S. stocks fell to session
lows on Friday, erasing earlier gains and dropping in heavy
trading, as forces in Ukraine engaged a Russian armored column
on Ukrainian soil.
A Ukrainian military spokesman said Ukrainian forces had
tracked a Russian armored column after it crossed the border
into Ukraine, and that after the engagement, "part of it no
Investors have been concerned about the potential fallout to
any escalation between the two countries, though recent signs of
easing tensions had lifted equities throughout the week.
"If the reports are true that there is an exchange of arms
between Russia and Ukraine, that is a setback in the recent
calm. It is hard to know how serious this is, but any sustained
upturn in violence could lead to a short-term setback," said Jim
McDonald, chief investment strategist at Chicago-based Northern
Trust Asset Management.
"Still, so far it has not paid to get too defensive."
The Dow Jones industrial average fell 63.19 points or
0.38 percent, to 16,650.39, the S&P 500 lost 4.95 points
or 0.25 percent, to 1,950.23 and the Nasdaq Composite
dropped 1.97 points or 0.04 percent, to 4,451.04.
The S&P 500 at one point rose as much as 0.45 percent on
(Editing by Bernadette Baum)