Wall Street falls as oil prices rise, Nasdaq confirms bear market

  • Dow industrial companies confirm correction
  • Financial, travel stocks lead to decline
  • Energy stocks outperform the broader market
  • Oil prices are at their highest since 2008
  • Indices down: Dow 2.37%, S&P 2.95%, Nasdaq 3.62%

(Reuters) – Wall Street’s main indexes fell sharply on Monday, with the Nasdaq Composite confirming it was in a bear market, as the prospect of a ban on oil imports from Russia sent crude oil prices higher and raised concerns about rising inflation.

The Nasdaq finished 20.1% down from its record close on November 19, confirming that the tech-heavy index has been in a bear market since hitting that record high, according to a widely used definition. It marks the Nasdaq’s first bear market since 2020, when the coronavirus outbreak crushed global economies.

The Dow Jones Industrial Average finished 10.8% lower from its record high on January 4, confirming that it was in a correction. A correction is confirmed when the indicator closes 10% or more below its standard closing level.

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Oil prices jumped to their highest levels since 2008 as the United States and its European allies considered banning Russian oil imports, in response to the country’s invasion of Ukraine, while Iranian crude seemed unlikely to quickly return to global markets.

Russia calls the campaign “Special Operation”.

energy (.SPNY)The S&P 500 group, notable so far this year, was one of the only sectors to post gains on Monday, up 1.6%. Read more

Mona Mahajan, chief investment analyst at Edward Jones, said: “This concern about oil has led to concerns about higher inflation and the potential for stagflation. I think there are broader concerns that growth could be hurt by the consumer. Higher prices are at the pump.”

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Dow Jones Industrial Average (.DJI) It fell 797.42 points, or 2.37%, to 32,817.38 points, the Standard & Poor’s 500 (.SPX) It lost 127.79 points, or 2.95%, to 4201.08 and the Nasdaq Composite (nineteenth) It fell 482.48 points, or 3.62%, to 12830.96 points.

Amazon and Microsoft (MSFT.O) hail (AAPL.O) It was among the biggest single slowdown on the S&P 500 while the financial sector (.SPSY) It fell 3.7 percent. Utilities sector (.SPLRCU)which is one of the defensive areas in the stock market, gained 1.3%.

Ukrainian officials said a Russian air strike hit a bread factory as the country’s negotiators met for talks with Russian officials after previous rounds did not halt the conflict. Read more

Shares of United Airlines Holdings Inc. fell 15 percent and Norwegian Cruise Line Holdings Inc. fell 15 percent (NCLH.N) It fell 11.6%, amid a broad slide in travel and leisure stocks as the jump in oil prices threatened to derail the nascent recovery.

Stocks struggled to start 2022 as concerns about the Russia-Ukraine crisis deepened the sell-off that was initially fueled by concerns about higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation. The S&P 500 index hit its lowest closing level since June 2021.

“The market has already been nervous about the Fed rate hike cycle,” said Burns McKinney, portfolio manager at NFJ Investment Group. “Now when you press higher energy prices on top of that…it is increasingly worrying the investment community that we may end up moving too fast. towards the later stages of the market cycle.

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Investors await the US consumer price report on Thursday, as the Federal Reserve is widely expected to raise interest rates later this month to combat rising inflation.

Low issues outnumbered advanced issues on the New York Stock Exchange by 3.62 to 1; On the Nasdaq, the ratio was 2.74 to 1 in favor of declining stocks.

The S&P 500 hit a new 52-week high and 69 new low; The Nasdaq Composite recorded 63 new highs and 546 new lows.

About 17 billion shares were traded on US stock exchanges, compared to the daily average of about 13 billion over the last 20 sessions.

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Additional reporting by Louis Krauskoff, Stephen Kolb and Caroline Falkevich in New York and Devik Jane and Sabahan, a contractor in Bengaluru; Editing by Sriraj Kalovila and Lisa Shumaker

Our criteria: Thomson Reuters Trust Principles.

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