Stocks ended the week on a decidedly sour note, with shares sliding sharply on Wall Street as investors ratchet down risk due to escalating tensions between Ukraine and Russia and mixed reviews on corporate earnings.
The Nasdaq composite was hammered, ending down 1.75%, while the Dow Jones industrial average lost 0.85% -- a 140-point drop -- and the Standard & Poor's 500 shed 0.8%.
Sabre rattling in Ukraine is part of the problem, as the country continues its move against pro-Russia separatists in the Eastern part of the country and Russia troops mobilize on the Ukraine border.
Earlier in the day in Ukraine, Prime Minister Arseniy Yatsenyuk upped the rhetorical stakes in the standoff, declaring: "The world has not yet forgotten World War II, but Russia already wants to start World War III."
"Traders (are) exercis(ing) caution amid escalating tension in Ukraine," says analyst Andrea Kramer at Schaeffer's Investment Research.
Investors digested weak earnings from Ford, which fell short of profit expectations by 6 cents per share but remained upbeat on the outlook for the rest of 2014. The carmaker's stock skidded 3.3% to $15.78 per share.
Amazon.com shares also ended down sharply, losing 9.9% to $303.83 per share, despite matching profit forecasts and topping sales estimates. Wall Street is concerned with the company's spending spree on new initiatives and offering breaks on shipping. Shares of Visa were also down after the credit card processor missed revenue expectations by a tiny margin.
"For the markets, the endgame on the Ukraine is how serious the U.S. and its allies are about isolating Russia," says Andrew Busch, editor of The Busch Update.
Stocks were struggling despite a strong reading on the mood of American consumers. The University of Michigan's index of consumer sentiment in April topped analyst expectations.
And despite the market's negative reaction to some individual corporate earnings reports, expected profit growth in the first quarter vs. last year is now at 3.3%, up from projections of 1% a few days ago and 2.2% on April 1, according to Thomson Reuters I/B/E/S. Still, that growth rate is well below the 6.5% growth expected on Jan. 1. With 48% of S&P 500 companies having reported, 68% have beat, topping the long-term average of 63%.
In related news, Standard & Poor's credit agency has cut Russia's credit rating from BBB to BBB-, which is a notch above so-called "junk" status, citing the capital flight and risk to investment in the wake of the Ukraine crisis. Secretary of State John Kerry has said that time is running out for Moscow to change its course in Ukraine or it will face further sanctions.
Russia's central bank also upped its key interest rate to 7.5% in an attempt to keep inflation under control.
European markets were also in the red.
At the close of trading, Germany's DAX had stumbled 1.5%. Britain's FTSE ended 0.3% lower, while France's CAC 40 flopped 0.8%.
Asian stock markets were mixed Friday. The Nikkei share average in Tokyo closed up 0.2% at 14,429.26.
And it was a pretty gloomy day for Chinese stocks. Hong Kong's Hang Seng index shed 1.2% and touched a four-week low on concerns about the state of China's economy and the health of the banking sector. The Shanghai composite index fell 0.8%.