NEW YORK: Wall Street stocks finished decisively lower yesterday after an early rally sputtered amid worries over the Ukraine crisis and shifting Federal Reserve (Fed) policy.
It was the fourth straight drop for major indices, reflecting unease at the deteriorating outlook in Ukraine, especially after Russian President Vladimir Putin recognised two eastern provinces' independence earlier this week.
The Dow Jones Industrial Average fell 464.85 points, or 1.38%, to 33,131.76, the S&P 500 lost 79.26 points, or 1.84%, to 4,225.5 and the Nasdaq Composite dropped 344.03 points, or 2.57%, to 13,037.49.
The Dow came within a hair's breadth of confirming it was in a correction yesterday, while the S&P 500 in the previous session confirmed it was in a correction when the index ended down more than 10% from its Jan 3 closing record high. A correction is confirmed when an index closes 10% or more below its record closing level.
The Nasdaq has tumbled more than 16% so far this year,
Yesterday, Ukraine's parliament imposed a national state of emergency aimed at helping to forge a response to the threat of a full-scale Russian invasion.
Earlier, the West unveiled more sanctions against Russia over its move into eastern Ukraine, and Moscow began evacuating its Kyiv embassy.
The market “is really agitated with all the uncertainty”, said Briefing.com analyst Patrick O’Hare, who also said wariness over the Fed’s shifting policy was an exacerbating factor.
O’Hare noted that US Treasury yields rallied yesterday, a sign that investors aren’t buying bonds in a so-called “flight to quality”.
Investors also have been on edge about possible aggressive tightening by the Fed to combat inflation.
“There’s been geopolitical risks and rhetoric that have given investors that much more to be worried about,” said Liz Young, head of investment strategy at SoFi.
“What it’s done is exacerbate the momentum that was already in place to the downside,” she said. “What we were seeing already coming into this was clearly a compression in multiples across a number of different highly valued areas of the market.”
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 2.92-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favoured decliners. – Reuters