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First Posted: 4/25/2014 (AP) Fears of a further escalation in Ukraine and a disappointing earnings statement from Amazon roiled global markets Friday.
Stocks around the world fell sharply as Russia's Foreign Minister Sergey Lavrov accused the West of plotting to control Ukraine , while U.S. President Barack Obama said he will call key European leaders later Friday to discuss what's happened since a deal was reached last week in Geneva to de-escalate the crisis. A further round of sanctions on Moscow appears to be on the table.
Ratings agency Standard & Poor's also downgraded its view on Russia's debt to one notch above so-called junk status and warned that the country "could see additional significant outflows of both domestic and foreign capital from the Russian economy."
The move further weighed on Russian markets and was followed soon by a surprise interest rate increase by the country's central bank. The MICEX index in Moscow closed down 1.6 percent while the ruble was 0.9 percent lower against the dollar, at 36.07 rubles per dollar.
"While there may be an element of profit taking driving markets lower today, I think a bigger contributing factor is the recent flare up in eastern Ukraine and the war of words now taking place between the U.S. and Russia," said Craig Erlam, market analyst at Alpari. "We've already seen on numerous occasions what impact this has had on the markets, with even the slightest hint of Russian intervention prompting a flight for safety among investors."
In Europe, the FTSE 100 index of leading British shares fell 0.3 percent to close at 6,685.69 while Germany's DAX fell 1.5 percent to 9,401.55. The CAC-40 in France shed 0.8 percent to 4,443.63.
In the U.S., the Dow Jones industrial average was down 0.7 percent at 16,387.95 while the broader S&P 500 index fell 0.6 percent to 1,868.39. The tech-heavy Nasdaq, which has led most sell-offs over recent weeks, underperformed, was trading 1.2 percent lower at 4,097.26 as Amazon stock fell 8.8 percent after it warned that spending on investments will likely lead to an operating loss in the second quarter.
Earlier in Asia, China's benchmark Shanghai Composite Index dropped 1 percent to 2,036.52 while Hong Kong's Hang Seng fell 1.4 percent to 22,238.06. Tokyo bucked the regional trend. Its Nikkei 225 added 0.2 percent to 14,429.26, rebounding after losing 1 percent a day earlier after talks between Prime Minister Shinzo Abe and President Obama failed to produce a trade agreement.
In currency markets, trading was fairly muted, with the euro was flat at $1.3837. However, oil prices took a hit from the worries over Ukraine and a barrel of benchmark New York crude was down $1.17 at $100.77.
<a title="Associated Press" href="http://www.ap.org" class="url org fn">Associated Press</a>

Ukraine tensions roil markets, Amazon disappoints