Stocks slide further amid Ukraine crisis; S&P in correction
Stocks are closing lower on Wall Street Tuesday after Russia sent forces into Ukraine’s eastern regions, escalating tensions.
The benchmark S&P 500 index fell 1 per cent to 4,304.76, and is now more than 10 per cent below it’s all-time high set in January, what’s known as a correction.
The Dow Jones Industrial Average and Nasdaq also lost more than 1 per cent.
Russian President Vladimir Putin recognised the independence of rebel-held regions of Ukraine, raising fears of an imminent full-scale invasion.
The US and European Union responded with sanctions. Technology shares also weighed on the broader market. Bond yields rose. The yield on the 10-year Treasury rose to 1.93 per cent.
The latest losses come as investors closely watch the crisis in Ukraine a day after Russia recognised the independence of several regions in Eastern Ukraine and decided to send in forces.
On Tuesday afternoon, President Joe Biden announced the US was ordering heavy financial sanctions against Russian banks and oligarchs, declaring that Moscow has flagrantly violated international law by invading Ukraine. Biden also said the US was moving additional troops to the Baltic states on NATO’s eastern flank.
Earlier in the day, the 27 European Union members unanimously agreed to levy their own initial set of sanctions targeting Russian officials over their actions in Ukraine.
US crude oil prices were up 1.3% after earlier rising more than 3% as energy markets remain volatile. European natural gas prices jumped after Germany withdrew a key document needed for certification of the Nord Stream 2 gas pipeline from Russia.
European stock markets, which have been particularly sensitive to developments in the Russia-Ukraine crisis, were mostly lower.
The Dow Jones Industrial Average fell 322 points, or 1%, to 33,754 and the Nasdaq fell 0.3%.
Home Depot was the biggest weight on the Dow, slumping 8.5% as concerns over the home-improvement retailer’s profit margins outweighed an otherwise solid quarterly financial report.
Technology stocks, which have an outsized impact on market indexes because of their pricey valuations, also fell. Apple shed 1.3%.
Bond yields rose. The yield on the 10-year Treasury rose to 1.95% from 1.92% late Friday. Stock and bond markets were closed on Monday for the Presidents Day holiday.
The crisis in Ukraine is yet another concern for investors who have begun 2022 trying to determine how the economy will fare amid rising inflation and looming interest rate hikes. Companies face supply chain problems and higher raw materials costs as demand for goods outpaces supply.
The Federal Reserve plans on raising interest rates to combat inflation, but Wall Street is uncertain about how the number of rate hikes and their frequency will impact the broader market and economy.
Investors also focused on the latest round of corporate report cards, especially from department stores. Shares in Macy’s and Dillard’s initially rose after reporting solid quarterly results, but shed their gains by midafternoon. Macy’s fell 3.7% and Dillard’s slid 4.4%.
Mattress maker Tempur Sealy International fell 19.6% after reporting disappointing financial results.
Deal making also helped lift several stocks. Television station owner Tegna rose 6.7% following a report that it’s being bought by Standard General. Book publisher Houghton Mifflin Harcourt rose 15% on news it’s being bought by Veritas Capital
