The Bay State economy could suffer if the crisis in the Ukraine lingers and begins to hurt Europe, where Massachusetts has the most at stake.
A showdown in Ukraine already has grabbed investors' attention and stoked fears of a tit-for-tat campaign of economic sanctions between Western powers and Russia — Massachusetts' 28th largest export market last year.
"We don't do nearly as much business with Russia (as with Europe, whose markets fell even more yesterday)," said Andre Mayer, senior vice president of communications and research at Associated Industries of Massachusetts. Germany's DAX, for example, plunged 3.4 percent.
"There's a lot more concern about what the broader economic implications might be, particularly for energy markets," Mayer said. "Western Europe gets natural gas from Russia. And anything that affects Europe affects us because Europe is our major export market, and we have a lot of European companies here. The general concern that we have less capacity than we thought to handle international crises is bound to be damaging to confidence."
U.S. stocks followed global markets tumbling yesterday on the news out of Ukraine.
The Standard & Poor's 500 index sank by as much as 25 points before regaining some of the ground it lost, to close down 13.72 points, or 0.7 percent, to 1,845.73, its largest drop since Feb. 3. The Dow Jones industrial average fell 153.68 points, or 0.9 percent, to 16,168.03, while the Nasdaq composite dropped 30.82 points, or 0.7 percent, to 4,277.30.
"Geopolitical uncertainty isn't good for markets," said Paul Edelstein, director of financial economics at IHS Global Insight in Lexington. "If this leads to a regional war or to sanctions against Russia, it could hurt the markets further. It doesn't necessarily mean the U.S. economy has to follow. If the situation goes on for a while, the markets could get used to it. But it is another source of volatility."
Herald wire services contributed to this report.
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