Wall Street retreats as Ukraine crisis hits financial stocks

Eight of 11 major S&P sectors fell in early trade, with fiscals falling 2.7% as US 10-year Treasury yields plunged to a five-week low amid a flight of safe-haven debt.

Wells Fargo lost 4.5%, while the broader bank index was down 3.8%. However, the energy sector outperformed with a gain of 1.1% as oil jumped above $100 a barrel.

Chevron Corp climbed 3.2% to a record high after the oil major extended its share buyback program and forecast operating cash flow through 2026.

A Russian armored column fell on the sixth day of an attack on its western neighbor in the Ukrainian capital of Kyiv. The conflict has drawn sharp retaliation from the West, with equity markets plummeting on Monday after several countries announced bold sanctions against Moscow over its invasion of Ukraine.

“Investors don’t like uncertainty and this is a huge level of uncertainty for financial markets. Markets are pricing at a higher risk premium on equities,” said Jeff Schulz, investment strategist at Clearbridge Investments.

“Given the fact that the US economy is accelerating, uncertainty will be relatively short-lived and it will be no surprise if markets regain their footing, when clarity is restored in the next few weeks.”

Data shows US manufacturing activity grew more than expected in February as COVID-19 infections eased, although hiring at factories slowed, keeping supply chains down and prices high for inputs has contributed.

At 10:19 a.m., the Dow Jones Industrial Average was down 303.82 points, or 0.90%, at 33,588.78, the S&P 500 was down 19.78 points, or 0.45%, at 4,354.16, and the Nasdaq Composite was down 10.39 points, or 0.08. %, at 13,741.01.

Target Corp. was a bright spot, with shares jumping 11.1% after the big box retailer forecast 2022 sales and profit that exceeded analysts’ expectations.

Defense stocks, including Lockheed Martin Corp, rose in the previous session with sharp gains. Shares of mega-cap growth names, including Apple Inc., were mixed.

The CBOE Volatility Index, also known as Wall Street’s fear gauge, was trading at 31.41 in the previous session after hitting its highest level since February 24.

Zoom Video Communications Inc. reported a decline of 2.6% after forecasting a decline in full-year revenue and profit, indicating a hit from stiff competition and lower sign-ups for its core meeting platform.

Lucid Group Inc fell 12.4% after the luxury electric carmaker revised its production forecast for 2022 due to “extraordinary supply chain and logistics challenges”.

There has been an increase in the number of issues declining to a 1.02-to-1 ratio on the NYSE and to a 1.10-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and 8 new lows, while the Nasdaq recorded 29 new highs and 54 new lows.