Wall Street is heading for its worst quarter since 2020

Traders work on the floor of the NYSE in New York
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. March 30, 2022. REUTERS/Brendan McDermid

March 31, 2022

By Bansari Mayur Kamdar and Amruta Khandekar

(Reuters) – US stocks fell on Thursday on worries over the raging conflict in Ukraine and the prospect of US interest rate hikes, pushing the main indexes on track for their worst quarter since the pandemic crash in 2020.

Optimism about this week’s peace talks faded as Ukrainian forces braced for fresh Russian attacks in the south-east region.

The United States imposed new Russia-related sanctions, while Russian President Vladimir Putin signed a decree requiring foreign buyers to pay for Russian gas in rubles from April 1.

Defensive sectors like real estate, healthcare and utilities were the only winners among the major S&P sectors. Utilities hit a new record high and are set to post their best monthly performance since 2002.

War-related spikes in commodity prices have added to inflation concerns, while a more hawkish Federal Reserve fueled growth concerns and pushed the three main US indices together toward their worst quarter since March 2020.

However, the benchmark S&P 500 index has rallied more than 5% this month on positive economic data and a rebound in megacap stocks.

“Investors are expecting a positive earnings season…so the market is ignoring the recession, the yield curve,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“It’s the end of the month, the end of the quarter, so you might have to switch portfolios at the last minute. And of course the market is adjusting to tomorrow’s employment data.”

The S&P energy index slipped as oil prices plunged more than 4% as the United States considers its largest-ever release from its strategic oil reserve. [O/R]

Still, the index should post its best-ever quarter as oil prices rose to multi-year highs on war-related supply shortages and concerns about Western sanctions against Russia.

Ahead of Friday’s closely-watched jobs report, data showed that US consumer spending slowed sharply in February as price pressures continued to mount and inflation posted its largest annual rise since the early 1980s.

Another set of data showed that jobless claims rose more-than-expected in the week ended March 26.

At 10:23 a.m. ET, the Dow Jones Industrial Average was down 208.57 points, or 0.59%, to 35,020.24, the S&P 500 was down 17.63 points, or 0.38%, to 4,584.82, and the Nasdaq Composite was down 51 .61 points or 0.36% at 14,390.67.

U.S.-listed shares of Baidu fell 7% after the Chinese search giant said it was reviewing options after being included on a U.S. securities regulator’s list of companies at risk of being delisted. Its streaming partner iQIYI lost 7.6%.

Drugstore chain Walgreens Boots Alliance fell 6.4% after the company kept its 2022 forecast of low-single-digit earnings growth unchanged.

Rising issues outweighed decliners with a 1.15 to 1 ratio on the NYSE and a 1.02 to 1 ratio on the Nasdaq.

The S&P index posted 46 new 52-week highs and two new lows, while the Nasdaq posted 35 new highs and 45 new lows.

(Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila) Wall Street is heading for its worst quarter since 2020


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