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Investors’ anxiety ahead of the referendum vote during the weekend in Crimea compelled benchmarks to end in the red on Friday. The tension between Russia and Ukraine along with concerns over a possible slowdown in China impacted the markets through this week. The S&P 500 fell below the key technical level of 1,850 for the second day in a row and the Dow slipped for the fifth straight day. Both these indices also suffered their worst weekly declines since late January. Drop in wholesale prices in February and fall in consumer sentiment in March somewhat impacted the markets.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) dropped 0.3% to close Friday’s trading session at 16,065.67. The Standard & Poor (S&P 500) too fell 0.3% to finish at 1,841.13. The tech-laden Nasdaq Composite Index declined 0.4% to 4,245.40. The fear-gauge CBOE Volatility Index (VIX) surged 9.9% to settle at 17.82. Total volume on the New York Stock Exchange was 3.3 billion shares. Declining stocks were outnumbered by advancing stocks on the NYSE. For 41% stocks that declined, 56% advanced.
For the week, the S&P 500, Dow and Nasdaq fell 2%, 2.4% and 2.1%, respectively. Nasdaq had its worst weekly run since April last year. Throughout the week, escalating political tension between Russia and the West over Crimea weighed heavily on the indexes. Also, concerns over a possible slowdown in China’s economy and less-than-expected growth in Japan’s economy had a negative impact on the markets.
On Friday, US stocks declined as investors focused on the upcoming vote in Crimea. Citizens of Crimea will decide on Sunday whether to stay with Ukraine or become part of Russia. Meanwhile, in response to the violence in Donetsk on Thursday night, Russia threatened to invade other areas of Ukraine and deployed more troops into Crimea.
President Barrack Obama had earlier warned Russia to curtail their aggression over Ukraine; otherwise they will be “forced to apply costs” to Moscow. However, the U.S. and Russia found “no common vision” over this ongoing crisis after hours of talk on Friday. These developments unnerved investors as they moved from equities and invested in safe haven-assets.
On the domestic front, the U.S. Department of Labor reported that producer prices fell 0.1% in February for the first time in three months. This fall was in sharp contrast to the consensus estimate of wholesale prices increasing by 0.2% in February. Lower profit margins for clothing retailers and a 1.1% fall in the cost of gasoline were cited to be the reasons behind the drop in wholesale prices for the month of February.
The University of Michigan and Thomson Reuters’ preliminary reading of consumer sentiment declined in March and touched the lowest level in four months. The gauge was at 79.9 in March, less than the consensus forecast of it rising to 82. Harsh winter weather affecting the growth of the economy was cited to be the reason for the dent in investors’ sentiment.
Five out of ten sectors of the S&P 500 ended in red. The Financial Select Sector SPDR (XLF) and the Technology Select Sector SPDR (XLK) led the decline as both the sectors declined 0.6%. Top holdings from the Financials sectors such as Wells Fargo & Company (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), Berkshire Hathaway Inc. (NYSE:BRK-B), Bank of America Corporation (NYSE:BAC) and Citigroup Inc. (NYSE:C) decreased 0.9%, 1.1%, 0.9%, 2.1% and 0.9%, respectively.
Key stocks from the Technology sector such as Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corporation (NYSE:IBM) and Oracle Corporation (NYSE:ORCL) fell 1.1%, 1.4%, 0.5%, 0.9% and 0.1%, respectively.

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