WALL Street ended sharply lower on Tuesday, with financial stocks bearing much of the damage for a second straight day as the Russia-Ukraine crisis deepened and stirred anxiety among investors.
The Dow Jones Industrial Average fell 1.76% to end at 33,294.95 points, while the S&P 500 lost 1.55% to 4,306.24.
The Nasdaq Composite dropped 1.59% to 13,532.46.
10 out of the 11 S&P 500 sector indexes fell, led by financials, down 3.7%.
Wells Fargo tumbled 5.8% and the broader banks index declined 4.8% as US 10-year Treasury yields slumped to five-week lows amid a flight to safe-haven debt.
Chevron Corp jumped 4% to close at its highest level ever after the company raised its share buyback program and forecast for operating cash-flow through 2026, and as oil prices surged.
The energy index rose about 1%.
Russia warned Kyiv residents to flee their homes and rained rockets on the city of Kharkiv as Russian commanders intensified their bombardment of Ukrainian urban areas in a shift of tactics after their six-day assault stalled.
The conflict has drawn sharp reprisals from the West including the blocking of certain Russian lenders’ access to the SWIFT international payment system.
“Investors are swimming in a soup of fear, and they don’t know how to incorporate geopolitical news into their pricing,” said Harvest Volatility Management head of research and trading Mike Zigmont.
“We’re dealing with a pure emotional investor response.”
The Philadelphia Semiconductor Index dropped 3.6%, with Advanced Micro Devices tumbling 7.7%.
Trading was busy. Volume on US exchanges was 14.9 billion shares, compared with a 12.3 billion average for the full session over the last 20 trading days.
On a positive note, data showed US manufacturing activity picked up more than expected in February as COVID-19 infections subsided, while construction spending surged in January.
“Given the fact that the US economy is accelerating, the uncertainty will be relatively short lived and it wouldn’t be a surprise if the market found its footing sometime over the next couple of weeks when clarity is restored,” said Jeff Schulze, investment strategist at ClearBridge Investments.
Target Corp jumped 9.9% after the big-box retailer forecast 2022 sales and profit above analysts’ expectations.
Defense stocks added to recent gains, with Lockheed Martin Corp and Northrop Grumman rallying over 3%.
The CBOE volatility index, also known as Wall Street’s fear gauge, rose to its highest since Feb 24.
Zoom Video Communications Inc slid 7.4% after it forecast downbeat full-year revenue and profit, signaling a hit from tough competition and lower sign-ups for its core Meetings platform.
The S&P 500 has declined about 10% in 2022, and the Nasdaq has lost about 13%.
Declining issues outnumbered advancing ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 1.80-to-1 ratio favored decliners.
The S&P 500 posted 26 new 52-week highs and 16 new lows; the Nasdaq Composite recorded 40 new highs and 150 new lows. — March 2, 2022
