In morning trading in New York, the Dow Jones industrial average was down more than 100 points, or 0.7%, while the Standard & Poor's 500 index was off 0.6% and Nasdaq composite 0.7% lower.
As is often the case when geopolitical turbulence jumps and the threat of war looms, investors were flocking to so-called safe-haven assets. Investors piled into U.S. government bonds, driving the yield on the benchmark 10-year Treasury note down to 2.61%, from 2.64% Friday and 3.03% at the end of 2013.
"Risk aversion has returned as tensions mount in the Crimea," Barclays told clients in a pre-market research note. "Safe havens continue to rally."
Similarly, gold prices rose, with an ounce fetching $1,345.50, up $23.90, or nearly 2% from Friday's close.
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Oil prices also rose as investors attempted to price in how potential economic sanctions against Russia would impact energy supplies, especially in Europe. A barrel of crude oil rose more than 2% higher $104.77 in early trading.
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Global markets are on edge after Russia's move into Ukraine's Russian-speaking Crimea injected a major bout of uncertainty into markets and raised fears of the conflict broadening. Over the weekend, Ukraine's prime minister declared that his country is "on the brink of disaster" as Russia's military advanced into the Crimea region and its troops blocked key naval and military bases.
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Still in a note to clients before the U.S. stock market's opening bell, Citigroup strategist Tobias Levkovich do! wnplayed the risk to U.S. stocks, barring a "breakout of major hostilities."
Recent events in the Ukraine, he says, could unsettle euphoric markets but should not be that disruptive.
"Geopolitical risks are always a concern but direct impact is needed to undermine equities in a significant way," Levkovich wrote. "The history of international conflicts having much impact on U.S. equities is very limited and thus a much larger conflict would be needed to have considerable negative impact."
The selloff in foreign bourses was more pronounced in Europe, whose closer proximity to the latest shock epicenter caused investors to turn cautious and pare back risk.
Russia's benchmark stock index was down as much as 11% Monday, its biggest loss since February 2009, according to Bloomberg.
Elsewhere across Europe bourses moved sharply lower. Britain's FTSE 100 index was trading 1.6% lower while Germany's DAX index dropped 2.8%. France's CAC 40 was down 2.3%.
Tokyo's Nikkei 225 index dropped 1.3% to 14,652.23 on Monday in Japan and Hong Kong's Hang Seng declined 1.5% to 22,500.67.
The threat of all-out war between Moscow and Kiev prompted Russia's central bank to temporarily increase its key interest rate to 7% from 5.5%. The ruble has been under sustained pressure in recent trading sessions and it hit a new low against the dollar on Monday. Shares in Moscow plunged while wheat prices — of which Ukraine is a major exporter — also fell sharply.
This week brings an ample helping of economic reports, including reports on how auto sales and manufacturing and non-manufacturing sectors did in February along with how construction spending and the trade deficit fared in January. The mostly closely watched number, the February employment report, comes Friday. The 6.6% unemployment is expected to hold steady, with 150,000 jobs added for the month compared to 113,000 jobs created in January.
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