Global stock markets and the dollar pulled back from strong early gains yesterday on worries about rising tensions in Ukraine, but US technology shares were higher on upbeat earnings from Apple and Facebook.
Ukrainian forces killed at least five pro-Moscow rebels yesterday as they closed in on the separatists’ military stronghold in the east, while Russia launched army drills near the border in response.
Fears of escalating conflict between Ukrainian troops and pro-Russian rebels in eastern Ukraine have risen since Russia annexed Ukraine’s Crimea region last month, and armed protesters in eastern Ukraine have captured several towns.
“Ukraine is a lit stick of dynamite,” said Todd Schoenberger, managing partner at LandColt Capital in New York. “All those geopolitical concerns warrant instability and higher commodity prices, and both of those are things Wall Street hates.”
The concerns were partially responsible for a quick turnaround in US stocks after a sharp rally at the opening. Facebook and Apple posted strong results after Wednesday’s market close, and Apple’s announcement of a large stock buyback and a stock split motivated buyers to jump into the most valuable US company.
Shares of Facebook were still up modestly on Thursday, while Apple gained 7.9 per cent.
Bellwethers Caterpillar, General Motors and Aetna also rose after results.
The dollar slipped against major currencies, hit by the tensions on the Russia/Ukraine border.
The dollar had earlier risen broadly after upbeat US durable goods data for March came in above expectations.
The escalating tensions in Ukraine also hurt European stock markets, erasing early gains from mergers and acquisitions activity and upbeat statements from electrical gear maker Schneider Electric and oil services group Technip.
The MSCI world equity index, which tracks shares in 45 nations, edged up 0.16 per cent, to 413.33.
The Dow Jones industrial average was up 30.83 points, or 0.19 per cent, at 16,532.48. The Standard & Poor’s 500 Index was up 6.53 points, or 0.35 per cent, at 1,881.92. The Nasdaq Composite Index was up 29.90 points, or 0.72 per cent, at 4,156.86.
The US dollar index, which measures the dollar against six major currencies, last traded down 0.08 per cent. The dollar was last down 0.32 per cent against the yen at $102.2200.
“Geopolitical risks are taking precedence. The move down in the dollar/yen in such a short period of time is pretty significant. This is all really risk aversion,” said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.
US Treasuries prices edged lower on the rising Ukraine tensions. The 10-year note was down 5/32 to yield 2.7041 per cent.
Oil prices were higher. Brent crude for June delivery added 99 cents to $110.10 a barrel, while US crude gained 65 cents to $102.09.
Spot gold climbed 0.5 per cent to $1,289.45 an ounce.