US stocks end sharply lower

Malaysia Airlines jet crash spook sell off amid geo political concerns

U.S. stocks ended sharply lower on Thursday, 17 July 2014 as selling took hold after a Malaysia Airlines jet crashed near the Ukraine-Russia border. Investors turned to assets perceived as havens, such as U.S. Treasurys and gold, pushing their prices sharply higher. The benchmark index spent the entire session in the red with the early weakness attributed to concerns about the impact of the latest set of U.S. sanctions against Russia. Airline stocks took a big hit after the jet crash news.

The Dow Jones Industrial Average dropped 161.39 points, or 0.9%, to 16,976.81. The Nasdaq Composite ended the day down 62.52 points, or 1.4%, at 4,363.45. The S&P 500 closed down 23.45 points, or 1.2%, to 1,958.12.

All ten sectors ended in the red with influential cyclical groups like energy, industrials and technology finishing at the bottom of the leaderboard.

Commodities are seeing keen safe-haven demand in the immediate aftermath of a Malaysian airliner with 295 people on board that crashed near the border of Ukraine and Russia. The uncertainty of the matter-whether it was shot down, terrorism, or mechanical malfunction or pilot error, spooked the market place. In overnight news, the U.S. and European Union have slapped new and tough sanctions on Russia. Asian and European stock markets were pressured a bit on this news.

There was still more downbeat economic data released from the European Union on Thursday. The bloc reported its construction spending fell 1.5% from April to May, but was up 3.5% from a year ago. The EU also reported its annual inflation rate remained at a very low 0.5% in June. The very low inflation and weak economic numbers in the EU have prompted the European Central Bank to inject monetary policy stimulus this summer, and more easing is likely on the way in the coming weeks.

U.S. economic data released on Thursday included the weekly jobless claims report, new residential construction, and the Philadelphia Fed business survey.

The initial claims level dropped to 302,000 from an upwardly revised 305,000 (from 304,000), while the consensus expected an increase to 311,000. The continuing claims level fell to 2.507 million from an upwardly revised 2.586 million (from 2.584 million), while the consensus expected the level to fall to 2.563 million Housing starts fell 9.3% in June from a downwardly revised 985,000 (from 1.001 million) in May to 893,000. The consensus expected an increase to 1.020 million. The drop in starts brought new residential construction levels to their lowest point since 863,000 homes were started in September 2013.

The Philadelphia Fed's Business Outlook Survey strengthened in July, increasing to 23.9 from 17.8, while the consensus expected a decline to 23.9. That was the best reading since March 2011 with nearly all sub indices showing significant improvement in July

In corporate news, Microsoft shares rallied 1% after the tech company said it would cut 18,000 jobs over the next year in a bid to simplify operations and integrate its Nokia Devices and Services business. It also said it would take a restructuring charge between $1.1 billion and $1.6 billion over the next year. SanDisk shares sank 14% after the flash-memory maker's third-quarter revenue forecast was lighter than anticipated.

Bullion prices rallied on Thursday, 17 July 2014 as a Malaysia Airlines crashed in Ukraine near the Russian border revived haven demand. Gold for August delivery rose $17.10, or 1.3%, to settle at $1,316.90 an ounce. September silver tacked on 36 cents, or 1.7%, to $21.13 an ounce.

Crude Oil futures rose at Nymex on Thursday, 17 July 2014 after getting a boost from Wednesday's surprise supply decrease and a flare-up on concerns about Ukraine, including news that a Malaysia Airlines jet had crashed in that country. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August rose $1.99, or 2%, to end at $103.19 a barrel.

Tomorrow, the Michigan Consumer Sentiment Index for July (consensus 84.0) will be released at 9:55 ET, while the Leading Indicators report for June (consensus 0.5%) will cross the wires at 10:00 ET.

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