The Dow Jones and the S&P 500 fall 1% after major sanctions against Russia

  • Defense stocks soar amid Russian-Ukrainian crisis
  • First Horizon pounces on $13 billion deal with TD
  • Indices down: Dow 1.15%, S&P 1.07%, Nasdaq 0.63%

Feb 28 (Reuters) – Major Wall Street indexes slid in volatile trading on Monday, with banking stocks leading the decline as investors digest powerful Western sanctions on Russia.

Citigroup (CN) fell 4.2%, dragging the S&P 500 Banks Index (.SPXBK) down 2.4% as the 10-year US Treasury yield fell. The broader financial index (.SPSY) fell 1.7%.

The weakness was somewhat offset by a 2.2% jump in the energy sector (.SPNY), fueled by higher oil prices.

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Global equities slumped, the Russian ruble fell to record lows and safe-haven assets were boosted after Western allies imposed new sanctions that limited Moscow’s ability to deploy its $630 billion in reserves. exchange and cut off some of its banks from the SWIFT global payment system. Read more

“Investors are trying to digest the potential impact of economic sanctions – that’s really more dominant in investors’ thoughts than the actual potential for greater military conflict,” said Rick Meckler, partner at Cherry Lane Investments in New York. Vernon, New Jersey.

Russian and Ukrainian officials met for peace talks earlier in the day, but the meeting ended without a breakthrough. They will now return to their respective capitals for further consultations ahead of a second round of negotiations. Read more

“The talks between the two parties would be on hope, and quite frankly, this market only trades on hope and the odds of situations unfolding,” New Vines Capital LLC managing director Andre Bakhos told Reuters. Bernardsville, New Jersey.

As of 12:46 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 393.37 points, or 1.15%, at 33,665.38, and the S&P 500 (.SPX) was down 47, 13 points, or 1.07%, to 4,337.52.

The Nasdaq Composite (.IXIC) fared better and fell 86.12 points, or 0.63%, to 13,608.51, helped by a 5.5% jump from Tesla Inc (TSLA.O) and gains in cybersecurity stocks. Palo Alto Networks (PANW.O), Fortinet (FTNT.O), Zscaler (ZS.O) and CrowdStrike Holdings climbed between 2.5% and 4.8%.

“Year-to-date tech is the worst performer, and the market loves tech, so there’s a bargain hunt in tech right now,” Bakhos said.

The deepening geopolitical crisis added to investor worries about soaring inflation and the Federal Reserve’s rate hike plans, putting all major U.S. stock indices for their second consecutive month of losses.

The S&P 500 and Nasdaq are set for their biggest two-month decline since the pandemic-induced crash in March 2020.

The CBOE Volatility Index (.VIX), also known as the Wall Street Fear Gauge, last traded at 30.73.

Defense stocks Raytheon Technologies (RTX.N), Lockheed Martin Corp (LMT.N), General Dynamics Corp, Northrop Grumman (NOC.N) and L3Harris Technologies gained between 2.7% and 6.8% after the announced that Germany would increase its military spending.

Delta Air Lines Inc fell 4.7% to lead losses among airline stocks after Russia closed its airspace to airlines from 36 countries in response to Ukraine-related sanctions aimed at its aviation sector. Read more

First Horizon Corp (FHN.N) jumped 28.4% after TD Bank Group (TD.TO) offered to acquire the US bank in an all-cash deal valued at $13.4 billion. dollars. Read more

Falling issues outnumbered advances by a ratio of 1.33 to 1 on the NYSE and by a ratio of 1.30 to 1 on the Nasdaq.

The S&P index recorded 18 new 52-week highs and 4 new lows, while the Nasdaq recorded 40 new highs and 58 new lows.

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Reporting by Devik Jain, Uday Sampath Kumar and Medha Singh in Bengaluru; Editing by Anil D’Silva and Aditya Soni

Our standards: The Thomson Reuters Trust Principles.

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