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Wall Street extends selloff on Ukraine worries

Nasdaq led the day's decline, falling more than 2 percent, while the information technology sector dropped 2.6 percent and was the biggest drag on the S&P 500

February 24, 2022 / 06:17 AM IST

Wall Street's major indices ended sharply lower on Wednesday, extending their recent rout as Ukraine declared a state of emergency and the US State Department said a Russian invasion of Ukraine remains potentially imminent.

The State Department added that Washington has not seen any indication of Russians backing away, while the White House said President Joe Biden has no intention of sending US troops to fight in Ukraine.

Earlier, the West unveiled more sanctions against Russia over its move into eastern Ukraine, and Moscow began evacuating its Kyiv embassy.

Nasdaq led the day's decline, falling more than 2 percent, while the information technology sector dropped 2.6 percent and was the biggest drag on the S&P 500.

"If anything (Russian) President Putin is digging his heels in despite the increased sanctions," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "That's really adding to elevated nervousness about further aggressive actions and what that will mean for commodities and inflation overall."

Close

The Dow came within a hair's breadth of confirming it was in a correction on Wednesday, while the S&P 500 in the previous session confirmed it was in a correction when the index ended down more than 10 percent from its Jan. three closing record high.

A correction is confirmed when an index closes 10 percent or more below its record closing level.

The Nasdaq has tumbled almost 19 percent from its record-high close on Nov. 19, nearing a 20 percent decline that many investors view as the definition of a bear market.

Investors also have been on edge about possible aggressive tightening by the Federal Reserve 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."

A Reuters poll showed the S&P 500 index still rising by end-2022.

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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 favored decliners.

The S&P 500 posted 2 new 52-week highs and 39 new lows; the Nasdaq Composite recorded 24 new highs and 550 new lows.

Volume on US exchanges was 11.98 billion shares, compared with the roughly 12.3 billion average for the full session over the last 20 trading days.



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Reuters
first published: Feb 24, 2022 06:17 am
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