por admin » Mar Mar 01, 2022 11:38 am
Stocks Fall, Oil Again Tops $100 Amid Sanctions
Russian ruble jumps after massive decline
Will Horner
Updated March 1, 2022 11:09 am ET
Index performance
Source: FactSet
As of March 1, 11:35 a.m. ET
Feb. 28
March
-2.5
-2.0
-1.5
-1.0
-0.5
0
0.5
1.0
%
NasdaqComposite
S&P 500
Dowindustrials
U.S. stock indexes fell and bond yields slipped, while oil prices rose to multiyear highs, as Russia’s invasion of Ukraine continued to whipsaw through markets.
The S&P 500 fell 0.7% early Tuesday. The blue-chip Dow Jones Industrial Average fell 1.1%, while the technology-heavy Nasdaq Composite was down 0.5%.
Stocks tied to Russia’s economy were hardest hit, with Austria’s Raiffeisen Bank, which has big operations in Ukraine and Russia, down 6.9%. Polymetal International, POLY -24.94% a London-listed firm with gold mines in Russia, was down 21%. Arms makers were among the best performers.
In the U.S., the war has further soured investors’ sentiment on markets. Though only 1% of revenues among S&P 500 companies stems from Russia and Ukraine, according to FactSet, investors are still worried about ripple effects on the global economy. The geopolitical crisis came when market sentiment was already fragile. Economies are facing the highest inflation in several decades, heaping pressure central banks to raise interest rates.
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“Now we have this shock, and this shock feeds into the biggest risk—sustained high inflation,” said Jon Maier, chief investment officer at Global X ETFs.
Safe-harbor assets were in demand, lifting gold prices and driving down government bond yields. Gold prices rose 1.5%. The yield on the benchmark 10-year U.S. Treasury note fell to 1.727% Tuesday from 1.836% Monday. Investors are betting that the Federal Reserve won’t act aggressively to curb inflation, given the war. The yield on German government bonds fell into negative territory for the first time since January.
Stock indexes around the world have been volatile in recent days as investors attempt to gauge the potential global economic impact from the invasion and resulting sanctions. Constricted supplies of Russian commodities could add to already elevated inflation, but investors hope the overall effect on the world’s biggest economies will be muted.
Bitcoin recently traded above $43,851, up some 5.28% from its 5 p.m. level on Monday, according to CoinDesk.
Oil prices rallied, rising back above $100 a barrel, to their highest level since 2014. Brent crude, the international oil benchmark, rose over 5% to $103.11 a barrel. Benchmark European natural-gas prices jumped over 16%. Members of the International Energy Agency could agree as early as Tuesday to release supplies from oil reserves in an effort to keep a lid on rising crude prices.
Energy companies’ stocks gained alongside oil prices, with Occidental Petroleum rising 5.3% and Chevron adding 3.6%. Meanwhile, Target’s shares jumped 11% after it reported strong sales during the holiday period. Albertsons rose 8% after the supermarket chain said it had begun a strategic review. Workday gained 5.2% after reporting earnings late Monday that beat estimates. Kohl’s added 2.7% after the retailer posted better-than-expected earnings.
Long Lines at ATMs in Russia as Ruble Collapses
Long Lines at ATMs in Russia as Ruble Collapses
Long Lines at ATMs in Russia as Ruble Collapses
Russians are lining up to use ATMs as ordinary citizens begin to feel the impact of Western allies’ sanctions on the country following Moscow’s invasion of Ukraine. Meanwhile, the Moscow Exchange remained closed Tuesday. Photo: AP Photo/Dmitri Lovetsky
Cease-fire talks have failed to produce concrete results so far. Russia and Ukraine have agreed to further talks, and investors have welcomed the fact that they have taken place. Still, Moscow is expected to increase the tempo of its assaults on major Ukrainian cities and is pouring manpower and equipment into the country.
“I am not sure what we will see from negotiations, but on the ground there will be no let up because [Russian President Vladimir] Putin has to come away from this war with something to show for it,” said Hani Redha, a portfolio manager at PineBridge Investments. “You will only see strengthened resolve from Russia.”
Mr. Redha said the conflict could pressure inflation even more, by threatening to constrict Russian exports of oil and gas. Russia is the single biggest gas exporter, and a major supplier of crude oil.
Traders at the New York Stock Exchange on Monday.
Photo: Allie Joseph/Nyse/Zuma Press
Russian markets have been dealt a heavy blow by the invasion and the ensuing sanctions, with investors jettisoning Russian stocks. A sharp, sudden interest-rate rise from the nation’s central bank helped send the ruble tumbling.
On Tuesday, the Russian ruble regained 3.2% of its value against the dollar, after falling almost 30% Monday. Market-data services have shown limited price updates this week, suggesting few transactions are taking place. The Russian stock market remained closed, after plummeting last week.
In Europe, the pan-continental Stoxx Europe 600 fell 1.7%. The London Stock Exchange suspended trading in shares of Russia’s VTB Bank after it said Bank of New York Mellon had resigned as the depositary for the company. JPMorgan Chase also halted trading of two funds because of the crisis in Ukraine.
In Asia Pacific, stock markets were mixed. Japan’s Nikkei 225 rose 1.2%, while Hong Kong’s Hang Seng Index edged up 0.2%.