Stocks Slide As Heightened Ukraine Tensions Weigh

February 18, 2022
Stocks Slide As Heightened Ukraine Tensions Weigh
U.S. stocks slid on Thursday, with the S&P 500 marking its biggest daily percentage drop in two weeks. Know more.

U.S. stocks slid on Thursday, with the S&P 500 marking its biggest daily percentage drop in two weeks, as investors shifted to defensive sectors and safe havens such as bonds and gold as geopolitical tensions between Washington and Russia over Ukraine flared.

After Ukrainian forces and pro-Moscow rebels traded fire in eastern Ukraine, U.S. President Joe Biden said there was every indication Russia was planning to invade in the next few days and was preparing a pretext to justify it. 

Russia accused Biden of stoking tensions and released a strongly worded letter saying Washington was ignoring its security demands and threatening unspecified “military-technical measures”.

On Wall Street, the growth-oriented technology and communication services sectors were among the hardest hit. Financials also declined as U.S. Treasury yields moved lower.

Developments in Ukraine have added to uncertainty about the path of the Federal Reserve’s tightening plans to fight inflation.

“There’s a lot of nervousness out there and as we approach the weekend nothing’s been settled between Russia and Ukraine,” said Michael James, managing director, equity trading at Wedbush Securities in Los Angeles.

“The continued weakness, especially in the growth names, is indicative of elevated nervousness and sellers continuing to swamp buyers in just about every stock.”

The defensive utilities and consumer staples sectors were Wall Street’s only advancers, with staples getting a lift from a 4.01% jump in Walmart after it posted record holiday sales. 

The drop for the Dow was the biggest daily percentage decline since Nov. 30 while the Nasdaq’s decline was its largest percentage fall since Feb. 3.

With the end of earnings season on the horizon, chipmaker Nvidia tumbled 7.51% as flat gross margins and concern about its exposure to the crypto market overshadowed an upbeat current-quarter revenue forecast and helped give the Philadelphia Semiconductor index its first daily decline this week. 

TripAdvisor Inc lost 2.50% after the hotel search website operator posted a surprise fourth-quarter loss. Albemarle Corp plunged 19.91% as the lithium producer forecast downbeat annual earnings.

As risk aversion pushed bond yields lower, big banks including JPMorgan Chase, Morgan Stanley, and Bank of America all lost ground. Goldman Sachs and Wells Fargo fell even after positive outlooks from the lenders. 

Gold was another beneficiary of the move toward safer assets, touching an eight-month high of $1,900.99 an ounce. 

Declining issues outnumbered advancing ones on the NYSE by a 2.81-to-1 ratio; on Nasdaq, a 3.63-to-1 ratio favored decliners.

The S&P 500 posted 6 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 27 new highs and 249 new lows.