A pile of bad news is pulling down the Dow Jones Industrial Average (DJINDICES:^DJI) today. The day started slow with some weak economic reports, but the markets dropped after it was announced that a Malaysian jetliner had crashed in Ukraine. As of 1:30 p.m. EDT the Dow was down 40 points to 17,097. The S&P 500 (SNPINDEX:^GSPC) was down 8 points to 1,973.

There were two U.S. economic releases today that got the stock markets off to a slow start.





Weekly new unemployment claims




Housing starts




Building permits



1.01 million

The one to pay attention to is the housing report. Housing starts dropped 9.3% in June to a seasonally adjusted annualized level of 893,000, the slowest pace so far this year and well below analyst expectations of 1.02 million.

US Housing Starts data by YCharts

It's not as bad as it looks. Building permits also dropped but the drop was just 4.3% to 963,000. The estimate of housing starts had a wide confidence interval so next month's update could show the actual level was higher. Also, the drop was concentrated in the South of the U.S., the U.S.' largest housing market, but all other regions were flat. Economists had been hoping that housing would continue to recover this year as was the case in 2013; however, this has not happened. With higher interest rates than last year and a sluggish first quarter, housing construction has essentially been flat this year.

Ukraine jet crash
The big news today, however, came when a Malaysian Airlines passenger jet flying from Amsterdam to Kuala Lumpur has crashed in Eastern Ukraine. Ukraine claims that the plane, which was carrying 295 people, was shot down by pro-Russian separatists, though it is all speculation at this point. It is not out of the realm of possibility as last week rebels claimed credit for shooting down a Ukrainian military transport jet.

Tensions in the region were already flaring after yesterday when the U.S. announced new sanctions on Russia and a Ukrainian fighter jet was shot down by a Russian fighter jet. The sanctions target energy giants Rosneft and Novatek, as well as Russia's third largest bank Gazprombank, and some other financial institutions. The Market Vector Russia ETF Trust (NYSEMKT:RSX) started the day down 3% and dropped to down 5.5% on the day after the news. European stocks also dropped as investors fear a return of tensions between Ukraine and Russia.

Visa (NYSE:V), the largest component of the Dow Jones Industrial Average, also has the highest exposure to Ukraine and Russia among Dow stocks at roughly 4% of its revenue. Gazprombank issues credit cards that use Visa's payment processing network. Unlike the last round of sanctions, Gazprombank's cards will still work during the sanctions. This, however, does again raise the chance that Russia will take retaliatory actions against U.S. companies doing business in Russia. As such, Visa is today's biggest Dow mover by weight, down 1.4% to $219.55