March 3 - Summary: Stock prices fell, gold prices rose and money flowed into treasuries as investors nervous of the growing threat of war shifted assets around despite signs of a rebounding U.S. economy. Conway G. Gittens reports.
A global sell-off drags Wall Street in the dumps as investors fret Russia and the Ukraine are headed for war, and tensions rise between Russia and the West. The Dow had its first triple-digit loss in a month with stocks down by the biggest since early February. Michael Gapen of Barclays says investors are worried about risk and acted accordingly. SOUNDBITE: MICHAEL GAPEN, DIRECTOR OF U.S. ECONOMIC RESEARCH AND GLOBAL ASSET ALLOCATION, BARCLAYS CAPITAL (ENGLISH) SAYING: "And you tend to see a flight to quality. You buy safer assets like U.S. treasuries, yields there are down and also you buy things like gold that tend to be viewed as safe havens in varying uncertain outcomes. So far it's been generally a classic risk off move and one that's been reasonable in size. I wouldn't say that things are too disorderly right now but certainly it's a market where investors are trimming risk appetite and taking a wait and see approach." With Russia, one of the world's major energy producers, crude oil prices shot up more than two bucks in the U.S. Geopolitical tensions overshadowed signs of a pick-up in the U.S. economy. Manufacturing activity rebounded in February after hitting an eight-month low at the start of the year. And consumer spending rose more than expected in January. Auto sales were also slightly higher than anticipated last month, but basically flat compared to a year ago. Automakers had to offer deeper discounts to get those vehicles off the lot and that could mean lower profits. Darden Restaurants, the parent of Red Lobster, Olive Garden and other casual dining chains, pre-announcing dismal quarterly results, putting the blame on severe weather. But the largest full-service restaurant operator has had a hard time convincing middle income consumers to sit down for a meal for a long time. It's going ahead with plans to spin off or sell Red Lobster, despite shareholder objections. Shares of Darden slipped more than 5 percent. On to Europe now, the Russian central bank had to step in after the rouble fell to a record low against the dollar. Russia's main stock index tumbled almost 11 percent in one day. As for other European indices - stocks suffered major losses on the Russia-Ukraine situation.