Wall Street slips as oil prices rise, Nasdaq confirms bear market

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, New York, U.S. March 3, 2022. REUTERS/Brendan McDermid

March 8, 2022

By Lewis Krauskopf, Devik Jain and Sabahatjahan Contractor

(Reuters) – Wall Street’s main indices fell sharply on Monday, with the Nasdaq Composite confirming it was in a bear market as the prospect of a ban on oil imports from Russia sent crude prices soaring and worries about a rising fueled inflation.

Nasdaq closed 20.1% below its Nov. 19 record high, confirming that the tech-heavy index has been in a bear market, by popular definition, since hitting that record high. This is the Nasdaq’s first bear market since 2020, when the coronavirus outbreak rocked the global economy.

The Dow Jones Industrial Average closed 10.8% below its closing record high on Jan. 4, confirming it was in a correction. A correction is confirmed when an index closes 10% or more below its record closing level.

Oil prices soared to their highest since 2008, when the United States and European allies considered banning Russian oil imports in response to the country’s invasion of Ukraine, while it looked less likely that Iranian crude would quickly return to world markets.

Russia calls the campaign a “special operation”.

Energy, the standout S&P 500 group so far this year, was one of the few sectors to gain 1.6% on Monday.[O/R]

“This concern about oil has raised concerns about higher inflation and the possibility of stagflation,” said Mona Mahajan, senior investment strategist at Edward Jones. “I think there’s just a broader concern that consumer growth could be hurt given higher prices at the pump.”

The Dow Jones Industrial Average fell 797.42 points, or 2.37%, to 32,817.38, the S&P 500 lost 127.79 points, or 2.95%, to 4,201.08, and the Nasdaq Composite fell 482.48 points, or 3 .62% ​​to 12,830.96.

Amazon, Microsoft and Apple were among the S&P 500’s biggest single detractors, while the financials sector fell 3.7%. The utilities sector, one of the defensive areas of the stock market, gained 1.3%.

Ukrainian officials said a bread factory was hit by a Russian airstrike as the country’s negotiators gathered for talks with Russian officials after previous rounds that failed to bring a pause in the conflict.

Shares in United Airlines Holdings Inc fell 15% and Norwegian Cruise Line Holdings 11.6% amid a broad downturn in travel and leisure stocks as the oil price jump threatened to disrupt an incipient recovery.

Equities have struggled to start 2022 as concerns over the Russia-Ukraine crisis deepened a sell-off initially fueled by worries about higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation. The S&P 500 marked its lowest close since June 2021.

“The market was already nervous about a Fed tightening cycle,” said Burns McKinney, portfolio manager at NFJ Investment Group. “Now add in higher energy prices…there is growing concern among the investor community that we could be moving quickly into the late stages of the market cycle.”

Investors are awaiting a US CPI report on Thursday, with broad expectations that the Fed will hike rates later this month to combat rising inflation.

Declining issues predominated on the NYSE at a 3.62 to 1 ratio; on the Nasdaq, a 2.74 to 1 ratio favored decliners.

The S&P 500 posted 50 new 52-week highs and 69 new lows; the Nasdaq Composite posted 63 new highs and 546 new lows.

About 17 billion shares changed hands on US stock exchanges, compared to the daily average of about 13 billion over the past 20 sessions.

(Reporting by Lewis Krauskopf, Stephen Culp and Caroline Valetkevitch in New York, Devik Jain and Sabahatjahan Contractor in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker) Wall Street slips as oil prices rise, Nasdaq confirms bear market

Caroline Bleakley

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