NEW YORK, RAW – Wall Street ended lower as the war in Ukraine overshadowed an acceleration in US jobs growth last month that pointed to strength in the economy.
Most of the 11 major S&P sector indexes declined on Friday, with financials leading the way. Banks extended recent losses as investors worried about how the West’s sanctions against Moscow may affect the international financial system.
Equities globally were weaker, with safe-haven assets in demand after Russian forces seized Europe’s biggest nuclear power plant in what Washington called a reckless assault that risked catastrophe.
The Labour Department’s closely watched employment report showed jobs grew by a more than expected 678,000 last month and that the unemployment rate fell to 3.8 per cent, the lowest since February 2020.
“Three or four weeks ago, we would have thought that this is an incredibly important number. But given the backdrop and the overall events that are happening in Europe, it’s just not,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte.
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“The potential for escalation in the hot war, the potential for a growth impact in Europe and more broadly, and knock-on effects on the commodity channel and inflation are taking up all of investors’ time and energy,” Hill said.
Amazon.com, Apple, Google owner-Alphabet and Microsoft all lost ground.
The crisis in Ukraine boosted energy stocks as crude prices and other commodities rallied on the back of sanctions against Russia, a major oil producer. The S&P 500 energy sector added to gains from earlier this week.
Richly valued growth stocks have faced the brunt of the recent selloff.
According to preliminary data, the S&P 500 lost 34.97 points, or 0.76 per cent, to end at 4,330.16 points, while the Nasdaq Composite lost 217.52 points, or 1.64 per cent, to 13,320.42. The Dow Jones Industrial Average fell 168.54 points, or 0.53 per cent, to 33,626.12.
Federal Reserve Chair Jerome Powell said this week he would support a 25-basis-point interest rate increase at the central bank’s March 15-16 policy meeting and would be “prepared to move more aggressively” later if inflation does not abate as fast as expected.
Soaring commodity prices have raised fears of even greater inflation, which could prompt the Fed to hike interest rates more aggressively.
Gap shares fell, even as the apparel retailer forecast upbeat 2022 earnings.