U.S. stocks declined on Thursday, with the Dow retreating from its record, after reports of a Malaysian plane going down in Ukraine.
Mayalysia Airlines said it had lost contact with the MH17, while the Associated Press quoted a Ukraine government minister as saying a plane had been shot down.
After wavering near unchanged, stock indexes turned decisively lower after Reuters cited a source in its report. The price of gold surged and Treasury yields fell.
“Everything was going fine until we had news of a Malaysian plane crash near the Russian border,” said Art Hogan, chief market strategist at Wunderlich Securities.
“The market is ready for a pullback, if it could find an excuse. The problem is the data are not providing it,” said David Kelly, chief market strategist at J.P. Morgan Funds.
“There is a risk of a tit-for-tat escalation between Russia and the West over Ukraine, but in a funny way the problem with ISIS and Iraq have given all parties a reason to talk to one another,” said Kelly of the conflict between Iraq’s government and ISIS, a Sunni militant group.
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After rising to an intraday record of 17,151.56, the Dow Jones Industrial Average was lately down 42.77 points, or 0.3 percent, at 17,095.43.
The S&P 500 shed 9.33 points, or 0.5 percent, to 1,972.24.
The Nasdaq lost 29.14 points, or 0.7 percent, to 4,396.2.
For every share rising, more than two fell on the New York Stock Exchange, where 219 million shares traded by 11:45 a.m. Eastern. Composite volume neared 1.2 billion.
Gold futures rose $16.80, or 1.3 percent, to $1,316.60 an ounce; the yield on the benchmark Treasury note fell 5 basis points to 2.483 percent.
“There’s a dichotomy between housing starts which were disappointing, and jobless claims which were positive. But all of that is overshadowed by sanctions against Russia,” said Hogan.
The impact is likely greatest “to Germany and the core of Europe, which are significant trading partners of Russia,” Hogan added.
Economic reports offered differing messages on the housing and labor markets, with housing starts unexpectedly falling in June, applications for jobless benefits declining last week and a gauge of manufacturing activity in the Philadelphia region expanding in July.
“It’s another piece of the puzzle saying we have an improving second-quarter economy,” said Hogan of the Philadelphia Federal Reserve’s factory index, which climbed to 23.9 this month.
The United States and Europe announced penalties late Wednesday against Russia for its role in destabilizing neighboring Ukraine.
Companies sanctioned by the white House include energy giants Rosneft and Novatek, as well as two banks and eight defense firms. The sanctions will not freeze the Russian firms’ assets nor prohibit most transactions with them, but will prevent them from accessing U.S. equity or debt markets for new financing with a maturity beyond 90 days.
Putin responded by saying that relations between the U.S. and Russia were nearing a “dead end,” which could damage U.S. business interests in his country, according to reports.
On Wednesday, U.S. stocks rose, again lifting the Dow into uncharted terrain, with investor sentiment boosted by corporate earnings and deals.