New York Report: US stocks fall despite strong factory activity

US STOCKS tumbled yesterday alongside other risky assets globally as tensions in Ukraine and Russia escalated after Russian President Vladimir Putin declared he had the right to invade his neighbour.

News that Ukraine mobilised for war on Sunday and Washington threatened to isolate Russia economically overshadowed better-than-expected US data, including an index showing that factory activity rebounded from an eight-month low in February.

The S&P 500 had closed at a record high on Friday, and profit-taking was expected on Wall Street due to the political uncertainty. The index found some support when it fell to 1,840, but broke below it after the first attempt.

The S&P 500 extended losses in early afternoon trading and then recovered slightly to close above the support level.

The Dow Jones industrial average fell 153.68 points or 0.94 per cent, to end at 16,168.03. The S&P 500 slid 13.72 points or 0.74 per cent, to finish at 1,845.73. The Nasdaq Composite dropped 30.818 points or 0.72 per cent, to close at 4,277.301.

Although the focus was on Ukraine, the economic calendar was busy yesterday. US factory activity rebounded from an eight-month low in February, according to the Institute for Supply Management, while the Commerce Department said consumer spending rose more than expected in January.

The data suggested that the economy was regaining some strength after a recent slowdown.