NEW YORK (Reuters) - World stock indexes fell on Friday on concern the tensions between Ukraine and Russia may depress economic activity in Europe, while the 30-year U.S. Treasury bond yield reached the lowest in nearly a year as investors sought safety in U.S. debt.
The uncertain outlook over the coming weekend for Ukraine drove selling in U.S. shares, boosting other safe havens such as gold and the yen.
The three main U.S. stock indexes all fell for the week, as disappointing earnings from Amazon and Ford on Thursday offset gains fueled by strong reports from Apple, Caterpillar and Travelers earlier in the week.
The 30-year U.S. Treasury bond’s yield fell to 3.42 percent, lowest since last June.
Russia warned Kiev on Friday that it would face justice after Ukrainian forces killed up to five pro-Russian rebels in eastern Ukraine on Thursday.
Standard & Poor’s downgraded Russia’s credit rating to triple-B-minus, one level above junk. That forced Russia’s central bank to raise interest rates by 50 basis points to 7.5 percent to try to head off inflation from a weakened currency.
“(The market‘s) a little bit tired, but then you throw in all this stuff - it’s Friday, you have the weekend coming, you have the whole Russia and Ukraine thing, Putin is pounding the table, so naturally you get this risk-off mentality,” said Ken Polcari, a director at O‘Neil Securities in New York.
The Dow Jones industrial average .DJI fell 140.19 points, or 0.85 percent, to end at 16,361.46. The S&P 500 .SPX lost 15.21 points, or 0.81 percent, to 1,863.40. The Nasdaq Composite .IXIC dropped 72.777 points, or 1.75 percent, to 4,075.561.
U.S. consumer shares were the weakest sector in the S&P. Amazon (AMZN.O) closed almost 10 percent down at $303.83 after sharp hikes in spending, which offset a revenue jump.
Ford Motor Co (F.N) fell 3.0 percent to $15.78 after first-quarter earnings missed expectations, hurt by higher warranty costs in North America.
Russian stocks fell 1.6 percent and Russia’s dollar bonds due in 2023 fell to 94.6 cents on the dollar, just off their lowest levels since issuance in September.
The ruble fell to 36.016 to the dollar, its lowest in nine days.
MSCI's measure of world stock markets .MIWD00000PUS was down 0.7 percent. European shares .FTEU3 closed down 0.8 percent on concerns that the United States and Europe were readying tougher sanctions on Moscow that could lead to Russian retaliation.
The benchmark 10-year U.S. Treasury note was up 7/32 to yield 2.6677 percent.
The dollar fell to 102.12 yen, down 0.2 percent on the day and its lowest in a week. But it recovered against the Swiss franc, gaining 0.02 percent to 0.8812 franc after earlier falling to a week low of 0.8798 franc.
German government bonds, favored by risk-wary investors, gained in tandem with gold. Spot gold was up 0.7 percent at $1,302.46 an ounce after hitting a 9-day high at
Brent crude oil finished down 0.7 percent at $109.58 a barrel but stayed near seven-week highs. U.S. oil settled down 1.3 percent at $100.60 a barrel, after plumbing a near three-week low at $102.05.
Reporting by Barani Krishnan; Additional reporting by Marc Jones and Anirban Nag in London; Editing by David Gaffen and Dan Grebler