March 3 (Bloomberg) -- U.S. stock-index futures fell, tracking a global selloff in equities, as Russia’s threat to invade Ukraine sent investors searching for havens.
Citigroup Inc. and Bank of America Corp. each lost 1.5 percent as financial stocks tumbled. The Market Vectors Russia ETF tracking companies from Gazprom OAO to OAO Lukoil dropped 8.2 percent. Yandex NV, a U.S.-listed online search engine operating in Russia, slumped 8.7 percent.
Futures on the S&P 500 expiring this month lost 0.8 percent to 1,843.00 at 8:05 a.m. in New York. Dow Jones Industrial Average contracts dropped 104 points, or 0.6 percent, to 16,203 today.
“We never know what will happen with Russia and this always makes people nervous,” said Michael Morris, head of equities at Mitsubishi UFJ Asset Management in London. “You have a president that is trying to expand Russia’s global political powers but the country may not have the capacity for this fight. It’s too soon to know what the outcome might be but I’m not at all surprised to see the markets down today.”
The tensions sent stocks tumbling around the world, with the MSCI All-Country World Index sliding 0.9 percent. Russian stocks had their biggest decline in five years and the Europe Stoxx 600 plunged 2 percent, its biggest slide in five weeks. Emerging-market stocks dropped 1.5 percent. Gold soared 1.8 percent and Treasuries rallied.
Ukraine mobilized its army and called for foreign observers after Russian President Vladimir Putin got approval to use military force in Ukraine. Groups of as many as 100 Russian soldiers attacked Ukrainian army units in Crimea, where ethnic Russians comprise the majority, the border guard service said.
U.S. Secretary of State John Kerry is traveling to Kiev today after warning of possible sanctions against Russia. European Union foreign ministers will hold an emergency meeting today, while the Group of Seven nations suspended planning for the Group of Eight summit in Russia in June.
The geopolitical tension comes after the S&P 500 rose 4.3 percent in February, the most since October, to end the month at a record 1,859.45. Investors have been speculating that recent weakness in data from housing to jobs was caused by weather and that the Federal Reserve will continue to support the economy.
U.S. equities are set to enter the sixth year of a bull market that started March 9, 2009. Three rounds of stimulus have helped push the S&P 500 up 175 percent from a 12-year low.
Options tied to gains in the Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, reached the highest prices in six years last week, reflecting bets that the calm prevailing in equities for the last year won’t last. A series of calls that appreciate in tandem with the VIX climbed to the highest level since May 2007 relative to puts, according to data compiled by Bloomberg.
Data at 10 a.m. in Washington may show that U.S. manufacturing expanded at a faster pace in February, economists in a Bloomberg News survey projected. The Institute for Supply Management’s factory index probably rose to 52 last month from January’s 51.3, according to the median estimate.
Yandex, whose market share in Russia is twice that of Google Inc., dropped 8.7 percent to $34.22. The shares have lost 13 percent this year, compared with a gain of 1.6 percent for a gauge of technology stocks listed on the S&P 500. The Russian ETF dropped 10 percent to $22.
Citigroup dropped 1.5 percent to $47.88, and Bank of America lost 1.5 percent to $16.29 as global financial stocks posted the second-biggest decline among 10 industry groups.