U.S. stocks fell in early trading today, after the Dow Jones industrial average closed at a record Wednesday, on reports a Malaysian passenger jet was shot down over Ukraine.
SanDisk Corp. dropped 12 percent after posting profit margins and sales forecasts that fell short of some analysts’ estimates. Microsoft gained 0.8 percent after saying it will eliminate as many as 18,000 jobs, the largest round of cuts in its history. UnitedHealth jumped 3.3 percent as earnings topped forecasts.
The Standard & Poor’s 500 Index fell 0.5 percent to 1,971.14 at 11:47 a.m. in New York. The Dow slipped 57.86 points, or 0.3 percent, to 17,080.34. The Russell 2000 Index of smaller companies dropped 0.7 percent for its third straight day of declines. Trading in S&P 500 companies was 33 percent above the 30-day average for this time of day.
“The headlines with the plane crashing and the following headline that it got shot down is the story right now,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview. “Any kind of geopolitical scenario is going to give root to any kind of turmoil in the markets, especially if it becomes more prevalent.”
Ukrainian rebels shot down a Malaysian jet carrying 295 people over eastern Ukraine near its border with Russia, a Ukrainian Interior Ministry official said. The Boeing 777 flight between Amsterdam and Kuala Lumpur was hit by a missile and went down near the eastern town of Torez, Ukrainian Interior Minister adviser Anton Gerashchenko said on his Facebook page.
Stocks also fell after the U.S. and European Union imposed sanctions on Russian banks, energy companies and defense firms in the latest attempt to pressure the country to end support for Ukrainian rebels.
“People are selling out of fear,” Todd Lowenstein, a fund manager who helps manage $16 billion at Highmark Capital Management Inc. in Los Angeles, said in a phone interview. “The market is really acute to geopolitical risk. Given where valuations are and the move lately amid all the M&A activity, when you have some geopolitical shocks, people will look for a reason to sell.”
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