Stocks open lower amid conflicting signals in Ukraine
After selling off to start the week, stocks rebounded Tuesday after Moscow said some troops had been pulled back from Ukraine’s border. But on Wednesday, NATO Secretary General Jens Stoltenberg said there were no signs Russia was de-escalating the military threat. Meanwhile, Ukrainians marked a “day of unity” to confront Moscow’s aggression.
The tensions are pumping anxiety into an already choppy market, which has been roiled by uncertainty regarding the Federal Reserve’s course to reining in the highest inflation in 40 years. Cboe’s volatility index, dubbed Wall Street’s “fear gauge,” is up roughly 50 percent year to date according to MarketWatch.
Around 12:15 p.m., the Dow Jones industrial average had dipped more than 220 points, or .6 percent. The Standard & Poor’s 500 index had also shed .6 percent, while the Nasdaq remained down about 1 percent.
“With the threat level still relatively high, there’s still a certain amount of risk premium in the markets,” Craig Erlam, senior market analyst at OANDA, said Wednesday in comments emailed To The Post. “We’re basically drifting from one crisis to another at the minute, from soaring inflation and higher interest rates to deteriorating living standards and now the prospect of conflict in Ukraine, which in turn exacerbates the first two.”
Oil prices also climbed higher, with Brent crude, the international oil benchmark, rising more than 2.6 percent to trade around $95.70 per barrel. West Texas Intermediate crude, the U.S. oil benchmark, was up more than 2.67percent, around $94.60 per barrel. Analysts predict prices could shoot past $100 a barrel if tensions between Russia and Ukraine escalate further.
Gold, in an investor safe haven in times of turbulence, edged .6 percent higher, to trade around $1,868.40 per troy ounce.
Aside from the crisis in Ukraine, investors also had a busy slate of earnings, housing, mortgage and retail data to digest. The Federal Reserve’s meeting minutes from January, which will be released this afternoon, will be hotly watched for details about the central’s banks plans for rate hikes.
Consumer spending boomed in January, the Commerce Department reported Wednesday, with retail sales picking up 3.8 percent last month even as households confronted the impacts of inflation everywhere from the grocery store to the gas pump.
“The strong, broad-based rebound in retail sales after the weak December is particularly impressive given the drag from the Omicron variant and serves as a reminder that the U.S. consumer doesn’t stay down for long,” Jeff Buchbinder, equity strategist for LPL Financial, said Wednesday in comments emailed to The Post.
Market sentiments had been shifting before the Ukraine crisis, as investors welcomed evidence that coronavirus surges tied to the omicron variant did less damage to the global economy than many had feared. The rally Tuesday demonstrated the market’s ravenous appetite for good news, now that the pandemic’s burden is lifting according to Ivan Feinseth, chief investment officer at Tigress Financial Partners.
“New Covid cases are down over 80% from the January peak, and high-frequency indicators continue to pick up, highlighting strong travel trends which have helped to lift reopening sensitive stocks, including airlines and cruise lines,” Feinseth noted Wednesday in comments emailed to The Post.
The robust rebound in travel helped deliver record revenue for Airbnb in 2021, the company said when it reported fourth quarter earnings Tuesday. The San Francisco-based home rental giant said it expects bookings to surpass pre-pandemic levels this quarter. Its shares rose more than 5 percent in afternoon trading.
ViacomCBS shares slumped 22 percent in afternoon trading after the media powerhouse said it was changing its name to Paramount as part of its bid to focus on streaming and reported earnings below analyst expectations.
