World stock markets fell while government debt prices rose yesterday as investors sought safety in low-risk assets after Turkish jets shot down a Russian warplane near the Syrian border.
The dollar fell against the traditionally safe-haven Japanese yen, helping to push oil and metals prices higher.
Gold rose one per cent.
Travel and leisure stocks fell after the US State Department late Monday warned US citizens of the risk to worldwide travel posed by what it called increased terrorist threats. United Continental, American Airlines and Delta Air Lines all were lower in early US trading.
The warplane incident was the first time a Nato member’s armed forces had shot down a Russian or Soviet military aircraft since the 1950s. Russia said its plane had been downed over Syria.
“This has really gotten investors’ attention,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
Wall Street cut its losses in midday trading, however.
The Dow Jones industrial average fell 16.9 points, or 0.09 per cent, to 17,775.78, the S&P 500 lost 5.46 points, or 0.26 per cent, to 2,081.13 and the Nasdaq Composite dropped 25.30 points, or 0.5 per cent, to 5,077.18.
The MSCI index of global stock markets fell 0.3 per cent, and a broad gauge of European stocks dropped 1.3 per cent.
Turkish shares dropped, as well, while the prospect of escalating tension between the former Cold War foes gave an additional push lower to German yields.
In US Treasuries, the 30-year yield hovered near three per cent, while benchmark 10-year Treasuries notes were up 6/32 in price to yield 2.227 per cent.
The dollar index, which measures the dollar against six major world currencies, fell 0.1 per cent.
But the dollar’s weakness and escalating tensions in the Middle East helped oil prices, with Brent futures up more than 2 per cent at $45.81 a barrel and US crude also up more than 2 per cent at $42.70.
Gold rose, recovering from near six-year lows after the warplane news.
Spot gold peaked at $1,080.51 and was up 0.7 per cent at $1,077.30 an ounce.