Ukraine tensions, Home Depot drag Wall Street lower
Reuters
Published Feb 22, 2022 06:47
Updated Feb 22, 2022 12:38
By Susan Mathew and Devik Jain
(Reuters) -Wall Street's main indexes slumped on Tuesday as the prospect of harsh Western sanctions against Russia over its conflict with Ukraine kept investors on edge, while a near 9% drop in Home Depot also weighed.
Six of the 11 major S&P 500 sectors declined, with consumer discretionary stocks leading the way with a 2.8% fall.
Global stocks took a beating after Russian President Vladimir Putin recognized two breakaway regions in eastern Ukraine and ordered troops to those regions, inviting fresh Western sanctions.
Markets now await U.S. President Joe Biden's remarks on the issue at 1 p.m. ET with Washington as well as the European Commission expected to announce potentially severe new sanctions on Russia on Tuesday.
Earlier in the day, Germany halted the Nord Stream 2 gas pipeline project designed to bring Russian gas to the country and Britain slapped sanctions on five Russian banks and three men close to Putin.
"We have the interest rate environment and (uncertainty about) what exactly the Federal Reserve is going to do..., coupled with a great uncertainty as to the ability of the United States to actually address the Russian-Ukrainian situation, (they) magnify the volatility factor," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
"A high level of uncertainty creates fear and fear manifests into defensive behavior. And the defensive behavior translates into some asset and sector rotation from a risky profile to a less risky profiles. So, I believe that the downside is to be favored right now."
At 12:06 p.m. ET, the Dow Jones Industrial Average was down 269.71 points, or 0.79%, at 33,809.47, the S&P 500 was down 23.88 points, or 0.55%, at 4,324.99, and the Nasdaq Composite was down 125.33 points, or 0.93%, at 13,422.73.
Home Depot Inc (NYSE:HD) slid 8.9% after the home improvement chain reported a decline in gross profit margins for the holiday quarter due to a jump in transportation and labor costs. Its stock was the biggest drag on the Dow.
Shares of most big banks rose, with JPMorgan Chase (NYSE:JPM) gaining about 0.7%. [US/]
U.S. business activity regained speed in February, data from IHS Markit showed, but higher prices for inputs remained a burden. Another set showed U.S. consumer confidence fell for a second straight month in February.
The CBOE volatility index, also known as Wall Street's fear gauge, was last up 29.59, well above its long-term average of 20.
Retailer Macy's Inc (NYSE:M) was flat after topping expectations for comparable sales in the crucial holiday quarter.
SoFi Technologies Inc fell 7.5% after the fintech company agreed to buy digital banking platform Technisys in a $1.1 billion deal.
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Digital World Acquisition Corp, the blank-check company behind former U.S. President Donald Trump's new social media venture Truth Social, gained 6.3% as the app climbed the charts after its debut on Apple (NASDAQ:AAPL)'s App Store.
Declining issues outnumbered advancers for a 2.24-to-1 ratio on the NYSE and for a 2.35-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and 29 new lows, while the Nasdaq recorded 24 new highs and 475 new lows.
Written By: Reuters
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