US futures down on threat of war in Ukraine

The US bourse is set to open higher as European leaders get ready to meet.

The US bourse is set to open higher as European leaders get ready to meet.

Published Mar 3, 2014

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New York - US stock index futures tumbled on Monday, alongside other risk assets, as Ukraine and Russia mobilised for war with Russian President Vladimir Putin declaring he had the right to invade his neighbour.

* Ukraine's Prime Minister Arseny Yatseniuk said Putin had effectively declared war on his country.

Yatseniuk leads a pro-Western government that took power when former president Viktor Yanukovich, a Russian ally, fled on February 21 after three months of street protests against his rule.

The United States threatened to isolate Russia economically after Putin's declaration.

* The S&P 500 closed at a record high on Friday, and profit taking was expected on Wall Street due to the political uncertainty.

* Russian stocks and bonds fell sharply and the central bank hiked interest rates to prop up the ruble.

The dollar-denominated RTS stock index tumbled 14 percent.

* S&P 500 e-mini futures fell 20 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures fell 150 points and Nasdaq 100 futures lost 40 points.

* Front-month futures on the CBOE Volatility Index ticked above the futures two months ahead, indicating market participants were more concerned about the short term reaction to the tension in Ukraine than its implications down the line.

* Gold prices hit a four month high as investors sought safe-haven assets, boosting gold stocks.

US-traded AngloGold Ashanti shares gained 5.1 percent in premarket trading.

* Though the focus will likely stay on Ukraine, the economic calendar is full on Monday.

Inflation and consumption data is due at 8:30 a.m. EST (15:30 SA time), while construction spending in January and the manufacturing ISM for February are expected at 10:00 a.m. (17:00 SA time).

Markit's final gauge of manufacturing for February is out at 8:58 a.m. (15:58 SA time). - Reuters

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