US: Stocks end higher despite Ukraine invasion, Dow up 2.5%

[NEW YORK] Wall Street powered higher on Friday as US traders snapped up equity bargains, despite unease that Russia's invasion of Ukraine would drive commodity prices up.

The benchmark Dow Jones Industrial Average finished 2.5 per cent higher at 34,058.75. The broad-based S&P 500 rose 2.2 per cent at 4,384.65.

The tech-rich Nasdaq Composite Index climbed 1.6 per cent higher at 13,694.62.

Indices had plunged in recent weeks on fears that Moscow would act on threats to send troops into its neighbor, but markets had performed better than expected when Russia invaded, in part because sanctions announced by the West weren't as harsh as they could be.

Edward Moya of Oanda noted that the Ukraine conflict, and the potential for it to drive gas prices higher and hurt the US pandemic recovery given that Russia is a major oil producer, could cause the Federal Reserve to move more slowly on its policy tightening plans.

The central bank is set to make its first rate hike since Covid-19 broke out next month to fight runaway US inflation.

The government reported Friday its personal consumption expenditures price index rose 6.1 per cent in the latest 12 months, its fastest pace since February 1982.

However, Moya predicted that "financial markets will remain on edge as this is just the beginning of the war in Ukraine, so the dip buying that occurred over the past two days will run out of steam."

Tom Martin of Globalt Investments said the initial equity gains were in tech stocks that had also suffered due to fear of imminent Federal Reserve rate hikes, but other stocks on Friday saw better performance.

"You have the value companies doing better and the Nasdaq not doing as well," he said.

AFP