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Stocks slide as heightened Ukraine tensions weigh

The S&P 500 fell 0.4% after having been down as much as 1.2% shortly after the U.S. said it is closing its embassy in Ukraine and moving all remaining staffers there to a city near the Polish border. The move comes as diplomatic efforts continued Monday in a bid to head off what U.S. officials have warned could be an imminent Russian attack on Ukraine.


Bond yields rose broadly, as did energy futures and the price of gold.


The Dow Jones Industrial Average fell 0.5% and the Nasdaq composite ended essentially flat after having been up 1% in the early going. The three major stock indexes were coming off a weekly loss.


The market slide adds to losses from a late-afternoon sell-off on Friday after the White House told Americans to leave Ukraine within 48 hours over concerns that Russia could invade that country soon. Other governments including Russia pulled diplomats and their citizens out of the country.


Wall Street is also trying to gauge how stocks and the broader economy will be affected from another source of uncertainty: How far and how quickly the Federal Reserve will move to raise interest rates to quash surging inflation.


“The market is really paying attention to geopolitical stuff right now, whether it’s stuff out of Ukraine or in D.C. with respect to what the Fed is going to do,” said Willie Delwiche, investment strategist at All Star Charts. “The bigger story is inflation and rates. The Fed is catching up to inflation, the bond market is now taking the Fed seriously and the question is ‘what do U.S. stocks do in that environment?”


The S&P 500 fell 16.97 points to 4,401.67. Nearly 80% of the stocks in the benchmark index fell. Financial, health care and energy companies were among the biggest weights on the market. Citigroup fell 1%, Moderna slid 11.7% and Exxon Mobil dropped 1.5%.


The Dow fell 171.89 points to 34,566.17. The blue-chip index had been down 433 points by midafternoon. The Nasdaq slipped 0.24 points to 13,790.92.


Smaller company stocks, which had been on pace for gains, also fell. The Russell 2000 slid 9.36 points, or 0.5%, to 2,020.79.


A potential escalation of the conflict between Russia and Ukraine also weighed heavily on European markets, which fell sharply.


Nations are still searching for a diplomatic solution to the situation and Russia’s top diplomat advised Russian President Vladimir Putin to continue a dialogue with the U.S. and its allies.


The price of U.S. crude oil climbed 2.5%, while natural gas prices jumped 6.4%. Russia is a major energy producer. Any military action that disrupts supplies could send shock waves through energy markets and global industry.


The price of gold, traditionally a safe haven during geopolitical uncertainty, rose 1.5%.


Bond yields also rose. The yield on the 10-year Treasury rose to 1.99% from 1.94% late Friday.


The crisis in Ukraine is yet another concern for investors as they try to figure out how rising inflation and looming interest rate increases will affect investments and the economy. Inflation stands at a four-decade high and the Fed is planning to raise interest rates to help cool inflation.


The central bank is expected to start raising its benchmark interest rate in March and Wall Street expects as many as seven rate increases this year.

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