Ukraine: Worried about the economy, Wall Street ends down sharply

The New York Stock Exchange ended a gloomy session in sharp decline on Monday, worried about the surge in oil prices, as well as the impact on the world economy of the war in Ukraine and the sanctions against Russia.

According to final results at the close, the Dow Jones index lost 2.37% to 32,817.38 points.

The Nasdaq fell back below 13,000 points, as it had done on the eve of the Russian invasion on February 23. The technology-dominated index plunged 3.62% to 12,830.96 points.

The S&P 500 fell 2.95% to 4,201.09 points, largely in the correction zone, the broader index having dropped more than 10% since the start of the year.

“Global markets remain jittery and risk averse due to the war” in Ukraine, Schwab analysts said.

“Nervousness continues to grow amid an inflationary backdrop that is worsening with the continued spike in oil prices,” they added.

The barrel of Brent from the North Sea came close to 140 dollars at the start of the Asian session, to end up 4.31%, at 123.21 dollars.

As for the barrel of West Texas Intermediate (WTI), it closed at 119.40 dollars, after crossing 130 dollars at the start of the session.

Russia warned on Monday of “catastrophic consequences” for the world market of the implementation of a Western embargo on Russian oil, discussed by Washington and the European Union as a response measure to the military intervention of Moscow in Ukraine.

“It is quite obvious that the refusal to buy Russian oil will lead to catastrophic consequences for the world market”, threatened the Russian Deputy Prime Minister, in charge of Energy, Alexander Novak.

President Joe Biden has “not made a decision at this stage” on a possible embargo on Russian gas and oil, the White House said.

Germany in particular opposes any embargo on Russian gas, on which it is very dependent, while the United States imports few Russian petroleum products (8% of their imports).

This competition over exports from Russia, a major oil producer, caused an acceleration in equity sales at the end of the session.

“One of the reasons the indices widened their losses late in trade is that there appears to be a united front in Congress in favor of a ban on imports of Russian crude, a measure that could be introduced on Tuesday,” Spartan Capital’s Peter Cardillo told AFP.

“If so, oil prices will rise further and this calls into question the pace of growth,” the analyst warned.

The conflict in Ukraine also weighed heavily on the euro, which fell in session to 1.0806 dollars, while the greenback reached a high in almost two years against the major currencies.

On the odds, except for the energy (+1.57%) and utilities (+1.31%) sectors, all S&P 500 sectors ended in the red, including -4.80 % for consumer goods, as runaway inflation threatens.

The communications services, communications technology and financials sectors all dropped more than 3.50%.

The prospect of fuel price inflation has plunged the shares of cruise lines such as Royal Caribbean (-9.09%) and Norwegian Cruise (-11.56%).

Same concern for the cost of kerosene which sent shares of airlines such as Delta Airlines (-12.78% to 30.11 dollars) and United Airlines (-15% to 31.20 dollars) down. .

While the sector will be affected by the sanctions, the big names in semiconductors have fallen sharply such as AMD (-5%), Nvidia (-6.91%), Qualcomm (-7.49%).

Nasdaq heavyweights also suffered like Amazon (-5.62% to $2,749.06) and Meta (Facebook, -6.29% to $187.47) and Google (Alphabet, -4.28% to $2,529 .29 dollars).

Visa (-4.79% to 190.70 dollars), Mastercard (-5.39% to 312.92 dollars) and Paypal (-6.31% to 93.61 dollars) also fell after the announcement of the suspension of their operations in Russia.

A rare ray of sunshine in the square, home goods chain Bed Bath and Beyond had an unparalleled session, climbing 34.18% to $21.71, after GameStop boss Ryan Cohen revealed have a nearly 10% stake in the company.

The Vix index, which reflects market concern and volatility, has climbed to its highest since Joe Biden took over the White House in January 2021.