New York - Major global stock markets declined and bond prices rallied on Monday as worries over the Gaza Strip and Ukraine overshadowed optimism over corporate earnings.
The safe-haven yen and Swiss franc inched up, and gold prices rose above $1 300 an ounce, as the market focused on uncertainty after last week's downing of a Malaysian jetliner over Ukraine.
Prices of US and European debt rose. German 10-year yields fell to about 1.14%, within reach of a 2012 record of 1.126%.
Israeli jets, tanks and artillery continued to pound Gaza as the death toll from a two-week conflict topped 500.
Reports that Ukrainian forces were moving into the eastern city of Donetsk added to concerns that the conflict in one of Europe's biggest countries may escalate.
Investigators began to inspect the bodies of victims of the downing of Malaysia Airlines flight MH17 last week.
"The market is taking a break in reassessing (US) second-quarter earnings. The development over the weekend was less than reassuring with the escalation of violence in Gaza and investigation of the downed Malaysian airliner," said Jim Russell, senior equity strategist at US Bank Wealth Management in Cincinnati.
The Dow Jones industrial average fell 88.68 points or 0.52%, to 17 011.5, the S&P 500 lost 8.31 points or 0.42%, to 1 970 and the Nasdaq Composite dropped 18.04 points or 0.41%, to 4 414.
MSCI's All-World Index was down 0.5%, while European stocks were down 0.6%.
Shares of Halliburton shares rose 0.9% to $71.58 after the world's number two oilfield services provider reported a 20% increase in quarterly profit.
So far this reporting period, 68% of S&P 500 companies are beating Wall Street's profit expectations, according to Thomson Reuters data.
That's in line with the 67% average for the past four quarters and above the 63% average since 1994.
In the foreign exchange market, the safe-haven yen and Swiss franc benefited.
The dollar was slightly lower at ¥101.30, while the dollar also dipped against the Swiss franc.
Benchmark 10-year Treasuries were up 8/32 in price to yield 2.45%.
Caution
Germany and other European Union members have taken a more cautious line on moves against Russia than the United States, mindful of the damage an exchange of sanctions with one of their main energy providers could do to Europe's economy.
Any limitations on trade would be liable to hurt businesses, with Germany and its strong ties with the Russian economy a particular concern.
Shocks to the system from Ukraine and Israel's ground invasion of Gaza come at a time when markets have been digesting conflicting economic signals from either side of the Atlantic.
Oil prices edged higher after Iran and six world powers failed to meet a July 20 deadline for a settlement over Tehran's nuclear activities. Brent crude oil was up 7 cents at $107.31 a barrel, while US crude was up 81c at $103.94.