Worries About Ukraine Lead To Continued Weakness On Wall Street

After ending the previous session mostly lower, stocks saw further downside during trading on Friday. The major averages all moved to the downside on the day, with the tech-heavy Nasdaq showing a particularly steep drop.

The major averages climbed off their worst levels of the day but still closed firmly in negative territory. The Dow fell 196.86 points or 0.5 percent to 33,614.80, the Nasdaq tumbled 224.50 points or 1.6 percent to 13,313.44 and the S&P 500 slid 34.62 points or 0.8 percent to 4,328.87.

For the week, the Nasdaq plunged by 2.8 percent, while the Dow and the S&P 500 both slumped by 1.3 percent. The Dow closed lower for the fourth straight week.

The weakness on Wall Street came as concerns about the impact of the Russian invasion of Ukraine continued to weigh on the markets, with Russia ratcheting up its attacks.

Russia has reportedly taken control of Ukraine’s Zaporizhzhia nuclear power plant, which is the largest nuclear power plant in Europe.

The Russian attack on the plant had previously caused a fire to break out at the facility, raising concerns about a potential nuclear disaster.

Worries about Ukraine overshadowed a typically closely watched Labor Department report showing U.S. employment once again jumped by much more than expected in the month of February.

The report showed non-farm payroll employment spiked by 678,000 jobs in February after surging by an upwardly revised 481,000 jobs in January.

Economists had expected employment to increase by 400,000 jobs compared to the addition of 467,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate dipped to 3.8 percent in February from 4.0 percent in January. The unemployment rate was expected to edge down to 3.9 percent.

The report also showed a slowdown in the annual rate of wage growth, which economists suggested could lead to less pressure on the Federal Reserve to aggressively raise interest rates.

Sector News

Airline stocks moved sharply lower over the course of the session, resulting in a 5.6 percent nosedive by the NYSE Arca Airline Index. The index plummeted to its lowest closing level in well over a year.

A steep drop by treasury yields also contributed to substantial weakness among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index plunging by 3.4 percent and 2.8 percent, respectively.

Computer hardware and software stocks also saw considerable weakness on the day, contributing to the significant decrease by the tech-heavy Nasdaq.

Tobacco, networking and chemical stocks also showed notable moves to the downside, while gold, energy and utilities stocks moved sharply higher.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the downside during trading on Friday. Japan’s Nikkei 225 Index tumbled by 2.2 percent, while China’s Shanghai Composite Index slumped by 1 percent.

The major European markets also moved sharply lower on the day. While the French CAC 40 Index plummeted by 5 percent, the German DAX Index plunged by 4.4 percent and the U.K.’s FTSE 100 Index sank by 3.5 percent.

In the bond market, treasuries surged due to their appeal as a safe haven amid the ongoing war in Ukraine. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled 12 basis points to 1.724 percent.

Looking Ahead

Developments in Ukraine are likely to remain in focus next week, while traders are also likely to keep an eye on a Labor Department report on consumer price inflation.

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