NEW YORK, RAW – Wall Street stocks have ended sharply lower for the second straight session, as investors fret about deepening tensions between Russia and Ukraine.
Nine of the 11 major S&P 500 sector indexes declined on Friday, led by technology, down 3.0 per cent, and consumer discretionary, down 2.8 per cent.
The energy sector index surged 2.8 per cent as oil prices hit seven-year highs.
With investors already fretting about inflation and rising interest rates, selling on Wall Street accelerated after Washington warned that Russia had massed enough troops near Ukraine to launch a major invasion, and that an attack could begin any day.
Thomas Hayes, managing member at Great Hill Capital LLC in New York, said all eyes were on the region.
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“We just have to see how this plays out over the weekend and whether or not international leadership can bring this under wraps,” he said.
“If not, then the knock-on effects could be material, and that’s what the market is worried about.”
Nvidia tumbled 7.3 per cent, Amazon dropped 3.6 per cent, and Apple and Microsoft both lost over two per cent. The four companies weighed more than any others on the S&P 500’s decline.
The Dow Jones Industrial Average fell 1.43 per cent to end at 34,738.06 points, while the S&P 500 lost 1.90 per cent at 4,418.64.
The Nasdaq Composite dropped 2.78 per cent to 13,791.15.
The Philadelphia Semiconductor index sank 4.83 per cent.
US exchanges were busy, with 13.4 billion shares changing hands, compared with a 12.6 billion average over the last 20 trading days.
Wall Street’s latest sell-off follows a slump on Thursday, when data showed consumer prices surged 7.5 per cent in January, the biggest annual increase in 40 years.
Comments from St Louis Fed Bank President James Bullard about aggressive rate hikes have also rattled investor sentiment.
For the week, the S&P 500 fell 1.8 per cent and the Nasdaq shed 2.2 per cent.
Traders are pricing in a half-point rate hike in March with just a scant chance of a smaller quarter-point raise, and heavy bets for a policy path that would bring rates to a range of 1.75 per cent-2.00 per cent by the end of the year.
“If the Ukraine is attacked, it adds more credence to our view that the Fed will be more dovish than the market currently believes as the war would make the outlook even more uncertain,” said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York.
A University of Michigan survey showed US consumer sentiment fell to its lowest in more than a decade in early February on expectations that inflation would continue to rise in the near term.
The CBOE volatility index, also known as Wall Street’s fear gauge, was up for a second straight session and hit its highest level since the end of January.
Online real estate platform Zillow Group jumped 12.7 per cent after beating Wall Street estimates for quarterly sales, boosted by an 11-fold revenue increase in its homes segment.
Under Armour slumped 12.5 per cent after warning that its profit margin would be under pressure in the current quarter.
Declining issues outnumbered advancers on the NYSE by a 2.40-to-1 ratio; on Nasdaq, a 2.54-to-1 ratio favoured decliners.
The S&P 500 posted 15 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 40 new highs and 208 new lows.