Wall Street stocks on Friday closed sharply lower for a second straight session, as investors fretted about worsening tensions between Russia and Ukraine.
Nine of the 11 major S&P 500 sector indices declined, led by technology, down 3 percent, and consumer discretionary, down 2.8 percent. The energy sector index surged 2.8 percent as oil prices hit seven-year highs.
With investors already worrying about inflation and rising interest rates, selling on Wall Street accelerated after Washington said that Russia had massed enough troops near Ukraine to launch a major invasion, and that an attack could begin any day.
Photo: AP
“We just have to see how this plays out over the weekend, and whether or not international leadership can bring this under wraps,” said Thomas Hayes, chairman and managing member at Great Hill Capital LLC in New York. “If not, then the knock-on effects could be material, and that’s what the markets is worried about.”
Nvidia Corp tumbled 7.3 percent and Amazon.com Inc dropped 3.6 percent, while Apple Inc and Microsoft Corp both lost more than 2 percent. The four companies weighed more than any others on the S&P 500’s decline.
The Dow Jones Industrial Average fell 1.43 percent to end at 34,738.06 points, while the S&P 500 lost 1.9 percent at 4,418.64.
The NASDAQ Composite dropped 2.78 percent to 13,791.15.
The Philadelphia Semiconductor Index sank 4.83 percent to 3,365.25.
US exchanges were busy, with 13.4 billion shares changing hands, compared with a 12.6 billion average over the past 20 trading days.
Wall Street’s sell-off followed a slump on Thursday, when data showed consumer prices surged 7.5 percent last month, the biggest annual increase in 40 years.
Comments from US Federal Reserve Bank of St Louis President James Bullard about aggressive rate hikes have also rattled investor sentiment.
For the week, the S&P 500 fell 1.82 percent, the NASDAQ shed 2.18 percent and the Dow lost 1 percent.
Traders are pricing in a half-point rate hike next month with just a scant chance of a smaller quarter-point raise, and heavy bets for a policy path that would bring rates to a range of 1.75 to 2 percent by the end of the year.
“If the Ukraine is attacked, it adds more credence to our view that the Fed will be more dovish than the market currently believes, as the war would make the outlook even more uncertain,” said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York.
A University of Michigan survey showed that US consumer sentiment fell to its lowest in more than a decade early this month on expectations that inflation would continue to rise in the near term.
The CBOE volatility index, also known as Wall Street’s fear gauge, was up for a second straight session — the highest since the end of last month.
Declining issues outnumbered advancers on the NYSE by a 2.40-to-1 ratio; on the NASDAQ, a 2.54-to-1 ratio favored decliners.
The S&P 500 posted 15 new 52-week highs and 13 new lows, while the NASDAQ Composite recorded 40 new highs and 208 new lows.
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