Shares down as Wall Street tumbles; Dollar adds to monthly gain

Thu Jul 31, 2014 4:33pm EDT
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By Angela Moon

NEW YORK (Reuters) - Global equity markets tumbled on Thursday, hurt by ongoing tensions with Russia and Argentina's second default in 12 years, while the U.S. dollar edged higher against a basket of major currencies for its strongest monthly gain in over a year.

Wall Street was hit hard, with the Dow and the S&P 500 posting their first monthly decline since January, while the Nasdaq fell for a third month in the last five.

The benchmark S&P 500 index closed below its 50-day moving average for the first time since April 15 and posted its biggest one-day percentage decline since April 10. The moving average is viewed as a sign of short-term momentum, and selling accelerated after the level was breached.

"It’s getting pretty ugly," said Peter Kenny, chief market strategist at Clearpool Group in New York.

"This is really a blending of several geopolitical themes that are driving that risk-off trade. Whether it is Ukraine/Russia crisis, whether it is Israel/Gaza, whether it is Argentine default - you pick the theme, but if you put them all together - it is providing the type of headwind that is making people more inclined to take money off the table than put it to work."

The Dow Jones industrial average .DJI fell 317.06 points, or 1.88 percent, to end at 16,563.3. The S&P 500 .SPX lost 39.4 points, or 2 percent, to 1,930.67 and the Nasdaq Composite .IXIC dropped 93.13 points, or 2.09 percent, to 4,369.77.

MSCI's All-World Index .MIWD00000PUS was down 1.5 percent and European shares .FTEU1 fell 1.2 percent.

Russia banned soy imports from Ukraine and may restrict Greek fruit and U.S. poultry, Russian news agencies reported on Thursday, in what could be responses to new Western sanctions.   Continued...

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange July 31, 2014.      REUTERS/Stringer/Remote