NEW YORK, March 2 ― Wall Street ended sharply lower yesterday, with financial stocks bearing much of the damage for a second straight day as the Russia-Ukraine crisis deepened and stirred anxiety among investors.
Ten of the 11 S&P 500 sector indexes fell, led by financials, down 3.7 per cent.
Wells Fargo tumbled 5.8 per cent and the broader banks index declined 4.8 per cent as US 10-year Treasury yields slumped to five-week lows amid a flight to safe-haven debt.
Chevron Corp jumped 4 per cent 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 per cent.
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 Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. “We're dealing with a pure emotional investor response.”
The Dow Jones Industrial Average fell 1.76 per cent to end at 33,294.95 points, while the S&P 500 lost 1.55 per cent to 4,306.24.
The Nasdaq Composite dropped 1.59 per cent to 13,532.46.
The Philadelphia Semiconductor Index dropped 3.6 per cent, with Advanced Micro Devices tumbling 7.7 per cent.
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 per cent after the big-box retailer forecast 2022 sales and profit above analysts' expectations.
Defence stocks added to recent gains, with Lockheed Martin Corp and Northrop Grumman rallying over 3 per cent.
The CBOE volatility index, also known as Wall Street's fear gauge, rose to its highest since February 24.
Zoom Video Communications Inc slid 7.4 per cent after it forecast downbeat full-year revenue and profit, signalling a hit from tough competition and lower sign-ups for its core Meetings platform.
The S&P 500 has declined about 10 per cent in 2022, and the Nasdaq has lost about 13 per cent.
Declining issues outnumbered advancing ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 1.80-to-1 ratio favoured 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. ― Reuters
