Stocks end lower amid caution on Ukraine and Gaza
U.S. stocks fell on Monday as global disapproval of Russian President Vladimir Putin increased after the downing of a passenger plane in Ukraine and amid international calls for a truce in the Israeli-Palestinian conflict.
"The world is a more dangerous place, and if you need an excuse to respond to the current levels of valuations, there's a really good excuse. Given the performance of the markets in 2013 and this year to date, common sense alone says maybe it's time to sell, or play it more safely," said Hugh Johnson, chairman of Hugh Johnson Advisors.
The fact that large capitalized companies have been outperforming small capitalized firms is telling, Johnson said. "In a bull market, that's a clear sign investors are becoming worried, and playing it safe. You can stay bullish, but you have to build a little defense."
Reynolds American fell after a Florida jury ruling that a business unit of the tobacco maker pay $23.6 billion in damages in the lung-cancer death of a smoker; Allergan shares gained after the drug developer said it would cut 1,500 jobs by the end of the year, and Halliburton rose after the provider of oilfield services reported a better-than-expected gain in quarterly revenue. Herbalife declined after hedge-fund manager Bill Ackman told CNBC he would "expose incredible fraud" at the supplement seller at a presentation Tuesday in New York.
The CBOE Volatility Index, a gauge of investor uncertainty, rose to a high of 13.62, and was lately up 6.2 percent at 12.81.
In eastern Ukraine, a train carrying the remains of most of the 298 victims of the Malaysia Airlines disaster left the site after Malaysia's prime minister reached an accord with the pro-Russian separatists controlling the area.
In the Gaza Strip, the Palestinian death toll reportedly climbed above 500 and seven Israeli soldiers died on Monday, following the deaths of 13 soldiers on Sunday, with the fighting continuing despite appeals for a ceasefire.
Stocks came off session lows, however, with the Dow regaining its footing above 17,000, after President Barack Obama said in a nationally televised statement that the costs to Russia would increase should it fail to find a diplomatic solution to the crisis in Ukraine, but stopped short of further sanctions.
Read MoreObama presses Putin on MH17 downing probe
"The president chose his words very carefully. I don't see any saber rattling, and maybe that's a good thing. The markets certainly don't want an escalation of these tensions," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
Exports represent about 40 percent of the German economy, and 10 percent of German export companies sell to Russia, while three-quarters of those companies have 25 percent of their exports going to Russia, Peter Boockvar, chief market analyst at the Lindsey Group, calculated in emailed research.
The figures are among those that illustrate "the problem EU countries have in dealing with the pressure of increasing sanctions. More sanctions against Russia will inevitably mean less growth for the EU," Boockvar said.
"The reason geopolitical events get dismissed is if it doesn't appear there's any impact on the global economy and earnings, but in this case, there is some uncertainty about that," said Johnson, citing the potential negative impact on Europe's economic recovery.
Russia is the largest oil, gas, uranium and coal importer to the European Union, according to the European Commission.
Major U.S. Indexes
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|---|
| .DJI | Dow Jones Industrial Average | DJIA | 39,512.84 | +125.08 | +0.32% |
| .IXIC | NASDAQ Composite | NASDAQ | 16,340.87 | -5.40 | -0.03% |
| .SPX | S&P 500 Index | S&P 500 | 5,222.68 | +8.60 | +0.16% |
After shedding as many as 125 points, the Dow Jones Industrial Average lost 48.45 points, or 0.3 percent, to 17,051.73, with General Electric pacing losses that extended to 22 of 30 components.
GE's drop came after J.P. Morgan cuts its estimates on the infrastructure and financial-services company.
The declined 4.59 points, or 0.2 percent, to 1,973.63, with consumer discretionary hardest hit and energy the best performing among its 10 major industry groups.
After a fleeting turn positive, the Nasdaq dropped 7.44 points, or 0.2 percent, to 4,424.70.
For every share rising, less than two fell on the New York Stock Exchange, where 541 million shares traded. Composite volume approached 2.6 billion.
The dollar gained against other global currencies and the 10-year Treasury yield fell a basis point to 2.472 percent.
The cost of dollar-denominated commodities including oil and gold increased, with crude futures rising $1.46, or 1.5 percent, to $104.59 a barrel and gold futures up $4.50, or 0.5 percent, to $1,313.90 an ounce on the New York Mercantile Exchange.
On Friday, U.S. stocks gained on the latest round of corporate earnings and as investors found solace in the view that political tensions appeared contained.
Read MoreStocks end with weekly gains as Ukraine tensions ebb
—By CNBC's Kate Gibson
Coming Up This Week:
Tuesday
Earnings: Apple, Coca-Cola, McDonald's, Microsoft, United Technologies, Verizon, Comcast, Travelers, Dupont, Credit Suisse, Lockheed Martin, Electronic Arts, Xilinx, State Street, Domino's Pizza, Kimberly Clark, VMWare, Juniper Networks, Harley Davidson
8:30 a.m. CPI
9:00 a.m. FHFA HPI
10:00 a.m. Existing-home sales
Wednesday
Earnings: Boeing, Pepsico, AT&T, Facebook, Dow Chemical, EMC, Gilead Sciences, Qualcomm, General Dynamics, Norfolk Southern, Owens Corning, Omnicare, Praxair, Whirlpool, Delta Airlines, Biogen Idec, Northrup Grumman, STMicro, Freeport-McMoran, Air Products, Ryder Systems, Raymond James, Glaxo Smithkliine, Cheesecake Factory, TripAdvisor, Assurant, Crown Castle, F5 Networks, Angie's List
7:00 a.m. Mortgage applications
Thursday
Earnings: Caterpillar, MMM, General Motors, Ford, Amazon.com, Visa, Starbucks, Bristol Myers Squibb, Eli Lilly, Roche Holdings, Hershey, Dr. Pepper Snapple, Pulte Group, Union Pacific, T. Rowe Price, KKR, Nasdaq Group, Altera, Chubb, Federated, Imax, JetBlue, Pandora, Decker's Outdoor, Kla-Tencor, Baidu, Brunswick, Dunkin Brands, Scholastic, Supervalu, Grubhub, Cabela's, Under Armour, Wyndham Worldwide, Imax, Flextronics, Freescale Semi, Maxim, SolarWinds, Mettler-Toledo
8:30 a.m. Initial claims
8:58 a.m. Manufacturing PMI
10:00 a.m. New-home sales
Friday
Earnings: Aon, Xerox, Statoil, Black and Decker, Tyco, Avery Dennison, Moody's, Covidien
8:30 a.m. Durable goods
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