2 Dow Stocks Worried About Russian Tensions and Putin's Wrath

Tensions between the U.S. and Russia increased again today after the U.S. announced new sanctions, a Russian plane shot down a Ukrainian fighter jet, a Malaysia Airlines plane crashed in Ukraine, and Vladimir Putin hinted at retaliatory sanctions against the U.S. and Europe. When tensions between major economic powers rise like this, stocks generally fall.

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has fallen 130 points near the end of trading, but the bigger sell-off is going on in Russia: The Market Vectors Russia ETF is down 7% today.

Two U.S. stocks worried about Russia
Most companies on the Dow Jones Industrial Average have some dealings in Russia, but two notable ones are Visa (NYSE: V  ) and ExxonMobil (NYSE: XOM  ) , which are down 1.8% and 1%, respectively.

As a global company, Visa can be caught in political conflicts.

Visa generates 4% of its revenue in Russia, and its partner Gazprombank is one of the targets of U.S. sanctions. Gazprombank and others won't be allowed to access capital in U.S. markets as part of an effort to put pressure on Russia to leave Ukraine's Crimea region. Right now Visa's business will go on as usual, but this recalls Russia's earlier pressure for Visa and other payment processors to pay billions of dollars for access to the Russian market. So far those threats haven't led to any payment or exit from the country, but today's actions are a step in the wrong direction.  

A bigger impact could be felt by ExxonMobil, which has a massive joint venture with Russian firm Rosneft to explore the Arctic, conduct Siberian fracking and Black Sea drilling, and construct natural-gas export terminals. The two companies are tied at the hip, and at the very least the tension between Washington and Moscow makes these massive partnerships uncomfortable. Right now, investors shouldn't panic, but Putin's reaction to recent events and his potential retaliation against U.S. companies could hit ExxonMobil where it hurts -- in the pocketbook.  

These kinds of tensions can hit stocks in the short term, but in the long term, the odds of a major U.S.-Russia conflict are low. Look at major dips as a buying opportunity, because there shouldn't be a big impact on earnings for Visa or ExxonMobil unless they're completely kicked out of Russia, which is unlikely.

An energy game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock and join Buffett in his quest for a veritable landslide of profits!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3033441, ~/Articles/ArticleHandler.aspx, 9/1/2015 6:41:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

Today's Market

updated Moments ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:35 PM
^DJI $16058.35 Down -469.68 -2.84%
V $68.96 Down -2.34 -3.28%
Visa CAPS Rating: ****
XOM $72.08 Down -3.16 -4.20%
ExxonMobil Corp CAPS Rating: ****