U.S. Stocks May See Further Downside As Russia-Ukraine Tensions Intensify
Stocks are likely to move to the downside in early trading on Tuesday, extending the steep drop seen to close out the previous week. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 147 points.
Concerns about increased tensions between the Ukraine and Russia will likely continue to weigh on the markets after Russia recognized two Ukrainian separatist regions – Donetsk and Luhansk – as sovereign states.
Russian President Vladimir Putin subsequently ordered troops into the territory as “peacekeepers,” intensifying a crisis the West fears could unleash a major war.
The U.S. and the U.K. plan to impose sanctions against Russia in reaction to the latest developments, while Germany has halted the certification of the Nord Stream 2 gas pipeline.
Early selling pressure may be somewhat subdued, however, as upbeat earnings news has helped offset the negative sentiment.
Shares of Macy’s (M) are moving sharply higher in pre-market trading after the department store operator reported better than expected fourth quarter results, increased its dividend and announced a new $2 billion stock buyback.
Home improvement retailer Home Depot (HD) also reported fourth quarter results that beat analyst estimates and boosted its dividend by 15 percent.
Shortly after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of February. The consumer confidence index is expected to drop to 110.0 in February from 113.8 in January.
After coming under pressure in morning trading on Friday, stocks fluctuated in the afternoon but still ended the day firmly negative. The major averages extended the steep drop seen on Thursday, with the Dow ending the session at its lowest closing level since early December.
The Dow and the S&P 500 briefly peeked above the unchanged in late-day trading, but moved lower going into the close. The Dow slid 232.85 points or 0.7 percent to 34,079.18, the Nasdaq tumbled 168.65 points or 1.2 percent to 13,548.07 and the S&P 500 fell 31.39 points or 0.7 percent to 4,348.87.
For the week, the Dow and the Nasdaq plunged by 1.9 percent and 1.8 percent, respectively, while the S&P 500 slumped by 1.6 percent.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong’s Hang Seng Index plummeted by 2.7 percent.
Meanwhile, the major European markets have turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is just below the unchanged line and the German DAX Index is down by 0.3 percent.
In commodities trading, crude oil futures are surging $2.64 to $93.71 a barrel after falling $0.69 to $91.07 a barrel last Friday. Meanwhile, after edging down $2.20 to $1,899.80 an ounce in the previous session, gold futures are rising $3.20 to $1,903 an ounce.
On the currency front, the U.S. dollar is trading at 115.10 yen versus the 114.74 yen it fetched on Monday. Against the euro, the dollar is trading at $1.1342 compared to yesterday’s $1.1311.
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