Ukraine Invasion Worries Continue To Weigh On Wall Street
After moving sharply lower early in the session, stocks continue to see significant weakness in afternoon trading on Thursday. The major averages have shown notable moves back to the downside following the recovery attempt seen late in the previous session.
Currently, the major averages are off their worst levels of the day but continue to post steep losses. The Dow is down 382.40 points or 1.1 percent at 34,551.87, the Nasdaq is down 236.27 points or 1.7 percent at 13,887.83 and the S&P 500 is down 54.54 points or 1.2 percent at 4,420.47.
The early pullback on Wall Street came amid renewed geopolitical concerns, as the Biden administration has reverted to describing a Russian invasion of Ukraine as “imminent.”
“The evidence on the ground is that Russia is moving toward an imminent invasion. This is a crucial moment,” U.S. Ambassador to the United Nations Linda Thomas-Greenfield told reporters this morning.
President Joe Biden also told reporters as was leaving the White House that there is “every indication” that Russia is prepared to attack Ukraine.
Adding to the concerns, the State Department said Russia has expelled the deputy chief of the U.S. diplomatic mission in Moscow.
The latest developments come after Ukraine and pro-Russian separatists traded accusations of attacks in the eastern part of the country.
Russian state-controlled media claimed that Ukrainian forces had shelled territory held by the separatists, while Ukraine has accused Russian-backed rebels of attacking a village in the region.
Negative sentiment also have been generated in reaction to the latest batch of U.S. economic data, including a Labor Department report showing an unexpected rebound in initial jobless claims in the week ended February 12th.
The Labor Department said initial jobless claims rose to 248,000, an increase of 23,000 from the previous week’s revised level of 225,000.
The rebound surprised economists, who had expected jobless claims to edge down to 219,000 from the 223,000 originally reported for the previous week.
The Commerce Department also released a report showing new residential construction in the U.S. pulled back sharply in the month of January.
The report said housing starts tumbled by 4.1 percent to an annual rate of 1.638 million in January after inching up by 0.3 percent to a revised rate of 1.708 million in December.
Economists had expected housing starts to edge down by 0.1 percent to a rate of 1.700 million from the 1.702 million originally reported for the previous month.
Meanwhile, the report said building permits climbed by 0.7 percent to an annual rate of 1.899 million in January after spiking by 9.8 percent to a revised rate of 1.885 million in December.
Building permits, an indicator of future housing demand, had been expected to plunge by 6.0 percent to a rate of 1.760 million from the 1.873 million originally reported for the previous month.
A separate report from the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area expanded at a slower rate in the month of February.
The Philly Fed said its diffusion index for current activity slid to 16.0 in February from 23.2 in January, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to dip to 20.0.
Banking stocks have moved substantially lower on the day amid a slump by treasury yields, with the KBW Bank Index tumbled by 2.4 percent.
Considerable weakness also remains visible among semiconductor stocks, as reflected by the 2.2 percent slump by the Philadelphia Semiconductor Index.
Nvidia (NVDA) has led the sector lower as concerns about flat profit margins and the graphics chipmaker’s exposure to the cryptocurrency market have overshadowed the company’s better than expected fourth quarter results and upbeat guidance.
Housing stocks have also shown a significant move to the downside, dragging the Philadelphia Housing Sector Index down by 2.1 percent.
Steel, brokerage and chemical stocks are also seeing considerable weakness on the day, while gold stocks have moved sharply higher along with the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.8 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index dipped by 0.3 percent, the German DAX Index and the U.K.’s FTSE 100 Index fell by 0.7 percent and 0.9 percent, respectively.
In the bond market, treasuries have moved significantly higher after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.8 basis points at 1.979 percent.
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