US stocks hold steady after worst drop since February

The stock market has muddled along sideways today as investors weigh up signs of pessimism from consumers about the outlook for the economy.

After the big slides we saw yesterday, it’s some consolation that stocks have stabilised on Wall Street, even as the Crimea referendum hangs over proceedings. By early afternoon in New York, the Dow Jones was up 0.08% at 16,122, while the broader S&P 500 was also little-changed, up just 0.04% at 1847.0.

Somewhat paradoxically, today’s US economic releases have been more discouraging than yesterday’s. The University of Michigan’s index of consumer sentiment slipped to 79.9 for mid-March, which was worse than expected and down from the reading of 81.6 seen last month. The softness in the report derives from the expectations component, as opposed to current conditions. For once, this can’t be laid at the feet of bad weather, and perhaps comes from the tensions with Russia.

With no catalysts remaining on the economic calendar for the rest of the day, how investors behave could well be dictated from hereon in by how events unfold regarding Ukraine, Russia and the West. Given the uncertainty surrounding the situation, I would be surprised if caution doesn’t comprise part of the character of this afternoon’s trading session in New York.

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