S&P 500 Reverses, Swings Lower as Ukraine-Russia Tensions Rise
By Yasin Ebrahim
Investing.com – The S&P 500 fell Wednesday, and remained in correction territory as ongoing Ukraine-Russia tensions forced the broader market to give up its intraday gains.
The S&P 500 fell 1.6%, the Dow Jones Industrial Average fell 1.2%, or 396 points, the Nasdaq fell 2.2%.
Ukraine declared a state of emergency on Wednesday, as intensifying fears that Russia could step up its invasion weighed on sentiment.
Reuters reported that Russia military equipment was on the move toward Eastern Ukraine, marking a blow to hopes of a diplomatic resolution just as Kyiv appears to be preparing for potential conflict. Reports of cyber attacks that took Ukrainian government and bank websites offline also added to tensions.
Ukraine urged its citizens to leave Russia and calling up all men of fighting age for compulsory military service.
The U.S. rolled out further sanctions, targeting Nord Stream 2 AG, the company tasked with of building Russia's Nord Stream 2 gas pipeline. The move follows the first tranche of sanctions, announced a day earlier, aimed at restricting Russia’s ability to raise funding from the West.
The Europe Union, meanwhile, is set for an emergency summit on Thursday to discuss next steps following Russia’s move into Ukraine.
The rising tensions continued to underpinned oil prices, boosting energy stocks.
Beyond the geopolitical tensions, a slew of quarterly earnings from consumer discretionary companies including TJX Companies (NYSE:TJX), Lowe’s Companies (NYSE:LOW) and Caesars Entertainment (NASDAQ:CZR) were in focus.
TJX Companies (NYSE:TJX) fell 5% after reporting fourth-quarter results that missed on top and bottom lines as a pandemic-induced rise in costs and supply chain disruptions weighed on growth.
Lowe’s, meanwhile, pared some gains but was up about 1% after it delivered better-than-expected guidance as strong demand for home-improvement tools and building materials bolstered fourth-quarter results.
Caesars Entertainment reported a narrower quarterly loss, supported by surge in revenue as demand rebounded following the easing of pandemic restrictions. Its shares rose more than 4%.
Big tech gave up early-day gains with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) leading to the downside.
Chip stocks also gave up its intraday gains pressured by Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), but Intel (NASDAQ:INTC) bucked the trend.
Intel was marginally higher after Raymond James upgraded the stock to market perform from underperform, citing limited downside potential.
The “prevailing bull case on Intel now is that it will finally make some incremental progress on its roadmap, which will arrest and reverse AMD’s share gains,” Raymond James Analyst Christopher Caso said.
The S&P 500's trend lower into correction territory has pushed it into oversold territory, and to levels that could trigger support.
“The trading chart above shows the S&P 500 closing in on 4200 support once again- but in doing so, is pressing into oversold territory,” Janney Montgomery Scott said in a note. “This implies we are likely to see another rally as the index approaches the 4200 range in sessions ahead.”
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