07.03.2022 22:14:30
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Continued Surge In Oil Prices Contributes To Sell-Off On Wall Street
(RTTNews) - Stocks moved sharply lower over the course of the trading day on Monday, extending the downward move seen over the two previous sessions. The major averages all showed substantial moves to the downside on the day.
The major averages saw further downside going into the close, ending the session at their worst levels of the session. The Dow plunged 797.42 points or 2.4 percent to 32,817.38, the Nasdaq plummeted 482.48 points or 3.6 percent to 12,830.96 and the S&P 500 tumbled 127.78 points or 3 percent to 4,201.09.
With the steep drop on the day, the Nasdaq ended the session at its lowest closing level in a year, while the Dow and the S&P 500 dropped to eleven and eight-month closing lows, respectively.
Concerns about the impact of the recent surge in oil prices contributed to the sell-off on Wall Street, with crude for April delivery spiking as high as $130.50 a barrel overnight.
The price of crude oil subsequently gave some ground after reaching its highest level since July 2008 but still jumped $3.72 to $119.40 a barrel.
The continued jump in oil prices comes as Secretary of State Antony Blinken said on NBC's "Meet the Press" on Sunday that the U.S. and European partners are in "active discussions" about banning the import of Russian oil in response to the country's invasion of Ukraine.
Higher crude oil prices are already impacting prices at the pump, with AAA saying the national average for a gallon of gas has reached a fourteen-year high of $4.065.
The increase in gas prices is likely to weigh on consumers, who are already grappling with higher prices due to elevated inflation.
This all comes as the Federal Reserve prepares to raise interest rates by at least a quarter point at its monetary policy meeting next week.
Sector News
Airline stocks turned in some of the market's worst performances on the day amid concerns about higher fuel costs, with the NYSE Arca Airline Index plummeting by 13.3 percent to its lowest closing level in well over a year.
Substantial weakness was also visible among housing stocks, as reflected by the 5.2 percent nosedive by the Philadelphia Housing Sector Index.
Semiconductor stocks also showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 4.9 percent.
Financial, tobacco, chemical and retail stocks also saw considerable weakness, moving lower along with most of the other major sectors.
Meanwhile, oil service stocks bucked the downtrend amid the continued jump in oil prices, resulting in an 8.6 percent spike by the Philadelphia Oil Service Index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index plummeted by 2.9 percent, while China's Shanghai Composite Index tumbled by 2.2 percent.
The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index slumped by 1.3 percent and the German DAX Index plunged by 2 percent.
In the bond market, treasuries regained ground after seeing early weakness but remained in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 1.751 percent after reaching a high of 1.806 percent.
Looking Ahead
Developments in Ukraine and the oil markets are likely to remain in focus on Tuesday, overshadowing reports on the U.S. trade deficit and wholesale inventories.
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