U.S. Stocks Move Sharply Lower On Worries About Russian Invasion Of Ukraine

(RTTNews) - Following the recovery attempt seen late in the previous sessions, stocks showed a substantial move back to the downside during trading on Thursday. The major averages all showed significant moves to the downside, with the tech-heavy Nasdaq helping to lead the way lower.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow tumbled 622.24 points or 1.8 percent to 34,312.03, the Nasdaq plunged 407.38 points or 2.9 percent to 13,716.72 and the S&P 500 dove 94.75 points or 2.1 percent to 4,380.26.

The sell-off on Wall Street came amid renewed geopolitical concerns, as the Biden administration has reverted to describing a Russian invasion of Ukraine as "imminent."

"The evidence on the ground is that Russia is moving toward an imminent invasion. This is a crucial moment," U.S. Ambassador to the United Nations Linda Thomas-Greenfield told reporters this morning.

President Joe Biden also told reporters as was leaving the White House that there is "every indication" that Russia is prepared to attack Ukraine.

Adding to the concerns, the State Department said Russia has expelled the deputy chief of the U.S. diplomatic mission in Moscow.

The latest developments come after Ukraine and pro-Russian separatists traded accusations of attacks in the eastern part of the country.

Russian state-controlled media claimed that Ukrainian forces had shelled territory held by the separatists, while Ukraine has accused Russian-backed rebels of attacking a village in the region.

Negative sentiment may also have been generated in reaction to the latest batch of U.S. economic data, including a Labor Department report showing an unexpected rebound in initial jobless claims in the week ended February 12th.

The Labor Department said initial jobless claims rose to 248,000, an increase of 23,000 from the previous week's revised level of 225,000.

The rebound surprised economists, who had expected jobless claims to edge down to 219,000 from the 223,000 originally reported for the previous week.

The Commerce Department also released a report showing new residential construction in the U.S. pulled back sharply in the month of January.

The report said housing starts tumbled by 4.1 percent to an annual rate of 1.638 million in January after inching up by 0.3 percent to a revised rate of 1.708 million in December.

Economists had expected housing starts to edge down by 0.1 percent to a rate of 1.700 million from the 1.702 million originally reported for the previous month.

Meanwhile, the report said building permits climbed by 0.7 percent to an annual rate of 1.899 million in January after spiking by 9.8 percent to a revised rate of 1.885 million in December.

Building permits, an indicator of future housing demand, had been expected to plunge by 6.0 percent to a rate of 1.760 million from the 1.873 million originally reported for the previous month.

A separate report from the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area expanded at a slower rate in the month of February.

The Philly Fed said its diffusion index for current activity slid to 16.0 in February from 23.2 in January, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to dip to 20.0.

Sector News

Semiconductor stocks showed a substantial move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 3.7 percent.

Nvidia (NVDA) helped lead the sector lower as concerns about flat profit margins and the graphics chipmaker's exposure to the cryptocurrency market have overshadowed the company's better than expected fourth quarter results and upbeat guidance.

A sharp pullback by treasury yields also weighed on the banking sector, resulting in a 3.7 percent nosedive by the KBW Bank Index.

Housing stocks also saw significant weakness on the day, with the Philadelphia Housing Sector Index plunging by 3.1 percent.

Biotechnology, airline and brokerage stocks also showed notable moves to the downside, while gold stocks bucked the downward trend amid a sharp increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index dipped by 0.3 percent, the German DAX Index and the U.K.'s FTSE 100 Index fell by 0.7 percent and 0.9 percent, respectively.

In the bond market, treasuries moved significantly higher after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.5 basis points to 1.972 percent.

Looking Ahead

Developments regarding Ukraine are likely to remain in the spotlight on Friday, overshadowing reports on existing home sales and leading economic indicators.