June 18, 2024


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Stock correction deepens amid Ukraine's deep crisis

Stock correction deepens amid Ukraine’s deep crisis

New York (AFP) – Stocks fell in afternoon trading on Wall Street Wednesday, extending the previous day’s decline as the crisis in Ukraine remained tense.

The S&P 500 was down 0.3% as of 12:04 PM ET, deepening the “correction,” or a 10% loss from its recent peak.

The Dow Jones Industrial Average fell 21 points, or 0.1 percent, to 33,574 points, and the Nasdaq fell 0.5 percent.

The losses were caused by retailers and other companies that depend on direct consumer spending. Amazon fell 1.3 percent and Starbucks 2.2 percent.

Technology stocks led the broad losses. Cisco Systems stock fell 1%. The sector is filled with companies with exorbitant stock values ‚Äč‚Äčthat tend to have more weight in the market swing up or down.

US crude oil prices remained volatile, despite the rise in energy stocks. Chevron stock rose 1.9%.

Healthcare companies also gained. Eli Lilly’s stock is up 1%.

Bond yields rose. The yield on the 10-year Treasury rose to 1.98% from 1.95% late Tuesday.

Losses increased from Tuesday’s low and the S&P 500 slipped into a correction. The index’s last correction was in the spring of 2020, as the pandemic upended the global economy. That correction worsened in a bear market – a drop of 20% or more – as the S&P 500 sank nearly 34% in about a month.

Wall Street is closely watching developments in Ukraine, as Russia masses its forces for a possible invasion. Russia began evacuating its embassy in Kiev. It has already sent soldiers to the eastern regions of Ukraine after recognizing the independence of some rebel-held areas.

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The United States and Western countries responded with sanctions and Germany withdrew the document needed to certify the Nord Stream 2 gas pipeline from Russia. The tensions have made energy prices volatile as any conflict between Russia and Ukraine disrupts supplies.

The prospect of war in Eastern Europe has heightened investor concerns about the global economy. Stocks have been falling in 2022 as investors gauge how rising inflation will affect economic growth and whether the Federal Reserve’s plan to raise interest rates this year will cool inflation.

Wall Street is also still reviewing how companies deal with supply chain problems and rising costs in the latest round of corporate report cards.

Lowe’s rose 3.1% after raising its earnings forecast for the year following a strong financial report for the fourth quarter. Security software maker Palo Alto Networks rose 3.5% after it raised its earnings forecast due to strong demand for cybersecurity.

TJX, the parent company of TJ Maxx and Marshalls, fell 1.2% after reporting disappointing fourth-quarter financial results.