Wall Street tumbles

US stocks sold off on Monday alongside other risky assets globally as Ukraine and Russia prepared for possible war after Russian President Vladimir Putin declared he had the right to invade his neighbour. Ukraine mobilised for war on Sunday and Washington threatened to isolate Russia economically as Moscow's biggest confrontation with the West since the Cold War unfolded.
The S&P 500 had closed at a record high on Friday, and profit-taking was expected on Wall Street due to the political uncertainty. The index found some support when it fell to 1,840, but broke below it after the first attempt. The S&P 500 extended losses in early afternoon trading but then recovered slightly to hover near the support level.
"It's too early to tell whether this would be an buying opportunity because we need to see how this (tension between Ukraine and Russia) plays out. It depends on how far this escalates but I would suggest hedging before making any bets at this point," said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas. The CBOE Volatility index VIX jumped more than 14 percent to 16.01, its biggest one-day jump in a month. The VIX, which generally moves inversely to the S&P 500, is used as hedges against further market decline.
Russian stocks and bonds fell sharply and the central bank raised interest rates to defend the ruble. The MICEX index of Moscow stocks tumbled 10.8 percent and the dollar-denominated RTS stock index dropped 12 percent. In US trading, the Market Vectors Russia ETF fell as much as 8.9 percent in heavy volume to a 4-1/2 year low of $22.16. It was last down 5.6 percent at $23.05.
But the Direxion Daily Russia Bear 3x ETF, a leveraged play on bad news in the fortunes of the nation's listed stocks, jumped 17 percent to $20.31. The Dow Jones industrial average fell 181.55 points or 1.11 percent, to 16,140.16, the S&P 500 lost 17.12 points or 0.92 percent, to 1,842.33 and the Nasdaq Composite dropped 38.93 points or 0.9 percent, to 4,269.188. Brent and US crude prices rose more than 2 percent each. The S&P energy sector index, which opened higher, was down 1 percent. Gold prices hit a four-month high as investors sought safe-haven assets, boosting gold stocks. US-traded AngloGold Ashanti shares gained 2.5 percent to $18.01.