Stock market today: Dow falls 597 points as Russia steps up attack

Major market benchmarks opened lower and losses accelerated as Russia targets civilian areas in Ukraine, including Kharkiv, the country’s second-largest city. Also, after warning of “high precision strikes”, Russian forces struck a television tower in Kyiv on Tuesday.

“The crisis in Ukraine is evolving rapidly, and with it investors’ expectations regarding international relations, commodity prices, inflation, the business operating environment and corporate margins,” says Lauren Goodwin, economist and strategist portfolio manager at New York Life Investments.

“As the crisis unfolds, stocks could rebound if developments point to contained conflict and lighter sanctions, while stocks could deteriorate in times of escalation.”

Today, stocks tumbled as the attacks escalated, with finance (-3.7%) the worst performing sector among notable blue chip losses American Express (AXP, -8.5%), Goldman Sachs (GS, -3.2%) and JPMorgan Chase (JPM, -3.8%).

Unsurprisingly, the Dow Jones Industrial Average (-1.8% to 33,294) was the biggest drop, followed by the S&P 500 Index (-1.6% to 4,306) and the Nasdaq Compound (-1.6% to 13,532).

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Some encouraging news today was the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI), which hit a higher than expected 58.6 in February.

“Manufacturing sector growth was solid in February, the inflation-sensitive price component declined during the month and the index component reflecting supplier delivery performance noted better supply chain conditions. supply only in January and December,” said Bill Adams, chief economist at Comerica Bank.

“The decline in coronavirus cases should help the domestic side of the economy improve further in the spring, but the fallout from rising energy and food prices and disruptions to international shipping related to the Russian-Ukrainian war pose a downside risk to near-term manufacturing,” he said. adds.

Other news on the stock market today:

  • Small cap Russell 2000 fell 1.9% to end at 2008.
  • Gold Futures Contracts climbed 2.3% to settle at $1,943.80 an ounce.
  • Bitcoin rose 5.5% to $44,252.28. (Bitcoin trades 24 hours a day; prices shown here are as of 4 p.m.)
  • Target (TGT) jumped 9.8% after the big-box retailer reported adjusted earnings of $3.19 per share and revenue of $31 billion in the fourth quarter, beating analysts’ estimates for earnings of $2.86 per share and sales of $31.4 billion. TGT also offered higher-than-expected forecasts for the coming fiscal year. “TGT continues to find ways to maintain traffic and sales momentum, which allows the retailer to continue to invest in pricing, labor, etc. while increasing the bottom line,” says Arun Sundaram (Buy), analyst at CFRA Research. “Fiscal 2023 results will be volatile quarter over quarter, but should generally improve as the year progresses.”
  • Foot locker (FL) fell 7.6% after B. Riley analyst Susan Anderson downgraded the sportswear retailer to Neutral (Hold) from Buy and cut its price target from $30 to $34 $ (FL closed today at $29.23). “We believe FL will be in a transition phase for at least a year as its exposure to Nike (NKE) is reduced, creating limited visibility on future sales/margins,” Anderson wrote. “This transition could open up approximately $900 million in storage space per year, which we believe will benefit other footwear and apparel manufacturers, including Crocs (CROX), New Balance and Adidas, but will create a empty for FL until that space can be filled.”

Why we are still watching inflation

Oil prices, on the other hand, rose significantly in today’s trading, even after the International Energy Agency (IEA) agreed to release 60 million in emergency crude reserves.

U.S. crude futures rose more than 11% at their session high before ending up 8% at $103.41 a barrel – their highest settlement since July 2014. And that rise in energy prices could stoke the fire under already sizzling inflation.

“The Russian-Ukrainian conflict is driving up prices for oil and other commodities, presenting the possibility that inflation will stay higher for longer,” said Lindsey Bell, chief investment strategist at Ally Invest. “It will be important to watch inflation over the medium term. Consumer confidence has already taken a hit and an Ally survey shows that 77% of Americans believe inflation will rise over the next 12 months.”

Several options are available to investors looking to mitigate the effects of runaway inflation on their portfolio, including seeking high-quality stocks in sectors considered more “inflation-resistant” than others: consumer staples, utilities and health, for example. . You can also play the hot hand with energy stocks or increase your exposure to rising commodity prices with these exchange-traded funds (ETFs). Each of the funds featured here provides investors with access to a wide variety of commodity futures and durable assets that can often act as a hedge against inflation.

James T. Quintero