US: Stocks slide as heightened Ukraine tensions weigh

[NEW YORK] US stocks slid on Thursday (Feb 17), with the S&P 500 marking its biggest daily percentage drop in 2 weeks, as investors shifted to defensive sectors and safe havens such as bonds and gold as geopolitical tensions between Washington and Russia over Ukraine flared.

After Ukrainian forces and pro-Moscow rebels traded fire in eastern Ukraine, US President Joe Biden said there was every indication Russia was planning to invade in the next few days and was preparing a pretext to justify it.

Russia accused Biden of stoking tensions and released a strongly worded letter saying Washington was ignoring its security demands and threatening unspecified "military-technical measures".

On Wall Street, the growth-oriented technology and communication services sectors were among the hardest hit. Financials also declined as US Treasury yields moved lower.

Developments in Ukraine have added to uncertainty about the path of the Federal Reserve's tightening plans to fight inflation.

"There's a lot of nervousness out there and as we approach the weekend nothing's been settled between Russia and Ukraine," said Michael James, managing director, equity trading at Wedbush Securities in Los Angeles.

"The continued weakness, especially in the growth names, is indicative of elevated nervousness and sellers continuing to swamp buyers in just about every stock."

The defensive utilities and consumer staples sectors were Wall Street's only advancers, with staples getting a lift from a 4.01 per cent jump in Walmart after it posted record holiday sales.

The Dow Jones Industrial Average fell 622.24 points or 1.78 per cent to 34,312.03, the S&P 500 lost 94.75 points or 2.12 per cent to 4,380.26 and the Nasdaq Composite dropped 407.38 points or 2.88 per cent to 13,716.72.

The drop for the Dow was the biggest daily percentage decline since Nov 30 while the Nasdaq's decline was its largest percentage fall since Feb 3.

With the end of earnings season on the horizon, chipmaker Nvidia tumbled 7.51 per cent as flat gross margins and concern about its exposure to the crypto market overshadowed an upbeat current-quarter revenue forecast, and helped give the Philadelphia Semiconductor index its first daily decline this week.

TripAdvisor lost 2.50 per cent after the hotel search website operator posted a surprise fourth-quarter loss.

Albemarle plunged 19.91 per cent as the lithium producer forecast downbeat annual earnings.

As risk aversion pushed bond yields lower, big banks including JPMorgan Chase, Morgan Stanley and Bank of America all lost ground. Goldman Sachs and Wells Fargo fell even after positive outlooks from the lenders.

Gold was another beneficiary of the move toward safer assets, touching an 8-month high of US$1,900.99 an ounce.

Among other big movers, DoorDash shot up 10.69 per cent after it reported upbeat quarterly revenue as food delivery demand showed no sign of slowing.

Hasbro gained 2.09 per cent after activist investor Alta Fox Capital Management nominated 5 directors to the toymaker's board and urged changes including a spinoff of its unit housing games such as Dungeons & Dragons.

Declining issues outnumbered advancing ones on the NYSE by a 2.81-to-1 ratio; on Nasdaq, a 3.63-to-1 ratio favoured decliners.

The S&P 500 posted 6 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 27 new highs and 249 new lows. REUTERS