Malaysia plane crash rattles US market

  • 18 July 2014
  • From the section Business

(Close): US shares ended sharply lower after geopolitical unrest unnerved investors.

On Thursday, a Malaysia Airlines flight crashed in Ukraine and Israel began a ground invasion into the Gaza strip.

The Dow Jones index fell 161.39 points, or 0.94%, to 16,976.81, closing back below the symbolic threshold of 17,000.

The S&P 500 plunged 23.45 points or 1.18%, to 1,958.12, and the Nasdaq index dropped 62.52 points or 1.41% to 4,363.45.

'Eggshells'

Malaysia Airlines Flight 17 - a Boeing 777 with 298 people aboard - crashed on the Ukrainian border near Russia.

That followed news earlier in the day of new US and European Union sanctions on Russia.

The uncertainty surrounding the circumstances of the crash - combined with news of an Israeli ground operation into Gaza - led investors to flee to so-called safe haven assets like gold and US Treasury bonds.

"I can't remember a time when there were more geopolitical skirmishes going on, all of which are creating uncertainty," said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston, who also said the market was "trading on eggshells".

Gold futures jumped $17.10, or 1.3%, to $1,316.90 an ounce on strong demand.

Cuts cheered

Shares in Microsoft rose 1.02% after the technology giant announced its biggest job cuts in its 39-year history.

Microsoft chief executive Satya Nadella announced the reductions as part of his effort to shift the company away from software towards online services, and said most of the cuts would be in the Nokia handset business, which Microsoft bought in April.

Another technology giant - Intel - failed to impress investors with its second-quarter earnings, despite notching better-than-expected PC sales, dropping 2.74% on Thursday.

However, Yum! Brands, which owns KFC and Pizza Hut, was the day's biggest loser, falling 6.89% after disappointing quarterly results.