March 14 (Bloomberg) -- U.S. stock futures fell, after the Standard & Poor’s 500 Index erased its 2014 gain yesterday, amid concern that the situation in Ukraine is escalating.
Futures on the S&P 500 expiring in June dropped 0.3 percent to 1,835.1 at 8:40 a.m. in New York. The equity gauge is heading for its largest weekly decline since January. Contracts on the Dow Jones Industrial Average fell 51 points, or 0.3 percent, to 15,996 today.
“Markets are nervous because we’ve got two catalysts,” Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin, said by telephone. “First, we have the Crimean crisis and people are going to be watching the referendum. Second, there are now signs China’s recovery will be more difficult than previously thought. It’s hard to figure out what will happen next, so investors are in a risk-off mode and have become defensive.”
The S&P 500 lost the most in five weeks yesterday as weaker-than-forecast economic data from China and escalating tension in Ukraine overshadowed reports showing an improving U.S. economy.
The U.S. and the European Union are threatening sanctions against Russia if it doesn’t back down from annexing Crimea, which is holding a referendum in two days to join Ukraine’s former Soviet-era master. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov meet in London today.
Russia warned that Ukraine’s government has lost control of the country, sparking concern the Kremlin may extend a military intervention. Russian President Vladimir Putin is preparing to “invade eastern Ukraine” after occupying the country’s Black Sea peninsula of Crimea, Estonian Defense Minister Urmas Reinsalu said in an e-mailed statement today. Kerry said the U.S. and Europe will take “very serious” steps the day after the referendum should there be no sign of a resolution to the crisis.
Preliminary data at 9:55 a.m. New York time today may show American consumer confidence rose this month, according to economists in a Bloomberg survey. The Thomson Reuters/University of Michigan index of sentiment probably advanced to 82 from 81.6 last month, the median estimate showed.
A separate report showed producer prices unexpectedly dropped in February, held back by the biggest decrease in the cost of services in almost a year. The 0.1 percent decrease in the producer-price index followed a 0.2 percent rise the prior month, a Labor Department report showed today in Washington.