The Stock Market Is Rallying, But Traders Are Watching Russia

Matthew BoeslerFeb 26, 2014, 21:12 IST

U.S. stocks are rallying following the release of better-than-expected new home sales data. Treasuries are getting a boost too, however, and equity indices across Europe are in the red as traders eye quickly unfolding developments in the Ukrainian political drama. Right now, the S&P 500 is trading at 1851, up 0.4%. The release of monthly new home sales data at 10 AM ET revealed a 9.6% rise in new home sales in February. This was well above Wall Street's consensus estimate of a 3.4% decline and runs counter to the story that weather has been the cause of weakness in key economic indicators in recent months. In Ukraine, there are reports of violence in the pro-Russian region of Crimea. This morning, Russian president Vladimir Putin put Russian combat troops on high alert for a drill, expressing concern for the safety of ethnic Russians in Ukraine. The Ukrainian hryvnia is in freefall and weakness has spilled over into the Russian ruble as well. But markets around the world are on edge. "The current run up in all fixed income is being attributed to Russian President Putin's orders for immediate combat readiness of troops in central and western Russia," says Tom Tucci, head of Treasury trading at CIBC. The charts below show moves in various markets. Across the top from left to right are the S&P 500, the U.S. dollar-Japanese yen exchange rate, and the euro-U.S. dollar exchange rate. Across the bottom are gold futures, 10-year U.S. Treasury futures, and December 2015 eurodollar futures.

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The Stock Market Is Rallying, But Traders Are Watching Russia