MONEY Markets

Markets React to Malaysian Jet Crash and Gaza Invasion

A part of the wreckage of a Malaysia Airlines Boeing 777 plane
A part of the wreckage of a Malaysia Airlines Boeing 777 plane is seen after it crashed near the settlement of Grabovo in the Donetsk region, July 17, 2014. Maxim Zmeyev—Reuters

Investors sold off stocks in response to news that a Malaysian Airlines jet had crashed in eastern Ukraine today, reportedly killing 295 people. Ukrainian government officials said the plane may have been shot down; pro-Russian separatist fighters in the region denied responsibility. Then late in the trading day came reports that Israeli forces had begun a ground invasion of Gaza.

The S&P 500 index of large cap stocks fell more than 1% for the day. The Dow Jones Insutrial Average also declined, closing at 16,977, back below the 17,000 milestone it first crossed earlier this month.

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Investors in general moved away from risky to safer assets. The 10-year Treasury bond yield fell below 2.5%, down from 2.55% yesterday. A fall in bond yields means a rise in price, and reflects investors being willing to accept a low return in exchange for the safety of U.S. government-backed securities.

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