Nasdaq plunges 3%, S&P 500 on track to confirm correction

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, Jan. 21, 2022. REUTERS/Brendan McDermid

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  • Kohl rises as Sycamore, Acacia show interest in acquisition
  • Energy, finance among top S&P 500 sector losers
  • Indices fall: Dow 2.17%, S&P 2.73%, Nasdaq 3.2%

Jan. 24 (Reuters) – US stock indices fell Monday, with the S&P 500 on course to confirm a correction as the prospect of a Russian attack on Ukraine dealt a double blow to investors already worried about an aggressive tightening of policies by the Federal Reserve.

A correction is confirmed when an index closes 10% or more below its record level. The S&P 500 Index (.SPX) is now 10.9% lower from its all-time high on January 3.

All 11 major S&P sectors fell during early trading, with nine falling more than 2% each.

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The economically sensitive small-cap Russell 2000 index (.RUT) fell 2.8%. The index fell a whopping 20.3% from its November 8 peak, putting it on track to confirm a bear market.

The US State Department announced Sunday it would order the relatives of diplomats to leave Ukraine, while US President Joe Biden weighed options to bolster US military assets in Eastern Europe to counter a build-up of Russian troops. to go.

The order was one of the clearest signs yet that US officials are bracing for an aggressive Russian move in the region. read more

A widely-watched measure of investor fears in US markets – the CBOE Volatility Index (.VIX) – was last seen at its highest level since January 2021.

“Ukraine is clearly a concern that is currently weighing on the markets,” said Darren Schuringa, chief executive officer of ASYMmetric ETFs in New York. “This will continue to weigh on the markets for the foreseeable future until there is some sort of resolution and more clarity on what the outcome looks like.”

The Fed’s policy meeting closes on Wednesday and the market will closely monitor how concerned the Fed is about rising inflation and how aggressive the US central bank will be to contain it. read more

Fed futures traders will be completely off with a 25 basis point hike in March, in addition to three more rate hikes by the end of the year.

Equities are off to a rocky start into 2022, with the Nasdaq index (.IXIC) now down 16% from its closing peak in November, as prospects of more rapid policy tightening sparked a rally in government bond yields that face a hard time. dealt a blow to Wall Street’s growth names.

At 10:20 am ET, the Dow Jones Industrial Average (.DJI) fell 744.95 points, or 2.17%, at 33,520.42, the S&P 500 (.SPX) fell 120.17 points, or 2.73 %, at 4,277.77, and the Nasdaq Composite (.IXIC) fell 439.17 points, or 3.19%, to 13,329.75.

Tesla Inc (TSLA.O) slid 7.7% into leading declines in mega-cap technology stocks.

“For many tech companies, multiples and valuations are certainly high in many cases and so if you don’t deliver the earnings to justify the valuation, there is room for continued and further corrections,” said Schuringa.

Kohl’s Corp (KSS.N) rose 31.6% after Reuters reported that private equity firm Sycamore Partners is preparing to make an offer for the U.S. department store days after a consortium backed by activist investment firm Starboard Value, proposed a buyout. read more

The number of declining issues surpassed the avant-garde by a 12.49-to-1 ratio on the NYSE and a 7.33-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and 27 new lows, while the Nasdaq made two new highs and 1,146 new lows.

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Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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