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US stocks drop as Ukraine tensions worsen

Wall Street stocks on Friday finished lower as worsening tensions over Ukraine overshadowed a US labour report that showed surprisingly strong jobs growth.

NEW YORK: Wall Street stocks on Friday finished lower as worsening tensions over Ukraine overshadowed a US labour report that showed surprisingly strong jobs growth.

The Dow Jones Industrial Average fell 45.98 points (0.28 per cent) to 16,512.89.

The broad-based S&P 500 shed 2.54 points (0.13 per cent) to 1,881.14, while the tech-rich Nasdaq Composite Index declined 3.55 points (0.09 per cent) to 4,123.90.

Stocks rose just after the Labour Department said the US economy added 288,000 jobs in April, far above the 210,000 projected by analysts.

But headlines on Ukraine rattled investors. Russia warned Ukraine of "catastrophic consequences" unless it halted a military operation against pro-Russian secessionists.

The crisis spread to the southern city of Odessa, where 38 people died in an arson attack against a trade union building after a day of violent clashes between pro-Russian and pro-Ukrainian militants.

President Barack Obama, speaking at the White House after meeting with German Chancellor Angela Merkel, threatened "severe sanctions" if Russia did not alter course.

"This Ukraine thing keeps grinding along and it doesn't appear it's going to end anytime soon," said Brent Schutte, market strategist at BMO Global Asset Management.

"People are worried this could turn into something a little bit bigger."

Dow member Pfizer lost 1.3 per cent after AstraZeneca rejected its latest bid to acquire the British pharmaceutical giant. AstraZeneca said the offer, raised to $106 billion from $99 billion previously, still "substantially" undervalues the company.

Another pharmaceutical giant in the Dow, Merck, halted a clinical trial of its vintafolide ovarian cancer treatment because of poor results. Merck shed 2.4 per cent. Endocyte, a bio-pharmaceutical company that has partnered Merck in the research, tumbled 61.2 per cent.

Chevron, another Dow component, reported an earnings drop of 27 per cent on lower petroleum production. Results translated into $2.36 per share, 15 cents below Wall Street estimates. Shares dipped 0.2 per cent.

The Estee Lauder Companies jumped 4.8 per cent as it raised its full-year profit forecast after beating earnings estimates. The cosmetics giant now expects earnings of $2.86-$2.90 per share from $2.80-$2.87.

LinkedIn fell 8.4 per cent on a disappointing forecast. The online professional-networking service projected annual revenues of $2.06-$2.08 billion, below the $2.11 billion expected by Wall Street analysts.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.59 per cent from 2.66 per cent on Thursday, while the 30-year sank to 3.37 per cent from 3.43 per cent.

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