NEW YORK CITY, RAW – Megacap growth stocks have dragged the Nasdaq and S&P 500 lower as investors worried that soaring commodity prices due to the Ukraine crisis will add to inflationary pressures.
Growth stocks including Amazon.com, Microsoft Corp, Tesla and Nvidia fell between 0.8 per cent and 2.7 per cent.
The energy index gained 0.3 per cent as Brent crude prices climbed to almost $US120 a barrel, their highest in nearly a decade, as sanctions disrupted Russian oil sales.
Soaring prices of oil and other commodities have raised concerns about surging inflation.
Defensive utilities and consumer staples indexes rose about 0.7 per cent each, with six of the 11 major S&P sectors advancing.
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Russian and Ukrainian negotiators met on Thursday and Ukraine said it would call for a ceasefire and humanitarian corridors to evacuate its besieged citizens as the war entered its second week.
Russian President Vladimir Putin told French leader Emmanuel Macron that Russia would achieve the goals of its military intervention in Ukraine whatever happens.
“When you have a situation like what’s going on in Ukraine, the news is the most important thing and it can change dramatically either in a positive or negative way any day. So it makes the risk a little bit higher,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab in Austin, Texas.
“That’s where you come in look at the VIX. It is at 30 – that doesn’t mean the market’s going down but it means there’s a very high level of uncertainty.”
The CBOE volatility index, also known as Wall Street’s fear gauge, was last trading at 31.18.
US stocks rallied sharply on Wednesday after Federal Reserve Chief Jerome Powell said he will back a quarter point rate increase when the Fed meets March 15-16, assuaging some fears of an aggressive policy tightening by the US central bank.
In early trading, the Dow Jones Industrial Average was down 22.03 points, or 0.06 per cent, at 33,869.32 and the S&P 500 was down 13.04 points, or 0.30 per cent, at 4,373.50 and the Nasdaq Composite was down 130.35 points, or 0.95 per cent, at 13,621.67.
Meanwhile, a measure of US services industry activity dropped to a one-year low in February and employment contracted, suggesting that a slowdown in economic growth at the end of 2021 persisted beyond the disruption from the winter wave of COVID-19 cases.
Kroger Co jumped 10 per cent after the grocer forecast upbeat annual same-store sales and profit, encouraged by strong demand for its pick-up and delivery services and sustained home-cooking trends.
Best Buy Co Inc rose 9.9 per cent after the consumer electronics retailer said it expects annual sales to surpass peak pandemic levels in 2024.
American Eagle Outfitters Inc slid 13.5 per cent after the apparel chain forecast a decline in earnings for the first half of 2022.
Declining issues outnumbered advancers for a 1.49-to-1 ratio on the NYSE and a 1.49-to-1 ratio on the NYSE.
The S&P index recorded 21 new 52-week highs and two new lows while the Nasdaq recorded 31 new highs and 82 new lows.
