Stock Market Slides As Russia Bombs Ukraine Nuclear Plant; Oil Jumps; Railroad Stocks Gain

The stock market fell Friday after Russia bombed a nuclear power plant in Ukraine, overshadowing a strong U.S. jobs report.

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The Nasdaq composite fell the most, down 1.4% in early afternoon trading, though it pared losses. The S&P 500 was down 0.9%, and the Dow Jones Industrial Average fell 0.7%. The small cap Russell 2000 dropped 1.5%.

Volume rose on the NYSE and Nasdaq compared with the same time on Thursday.

Russian forces shelled Europe’s largest nuclear power plant. The fire — which affected the Zaporizhzhia power plant’s training facility next to its nuclear reactors — was put out Friday morning. None of the six reactors were affected by the fire, and there was no radiation leak detected, The Wall Street Journal reported.

Yet, the attack caused worries of a massive environmental disaster, and showed that Russian attacks are becoming more indiscriminate.

Strong Jobs Report Doesn’t Help Stock Market

U.S. employers added 678,000 jobs in February, The unemployment rate fell to 3.8%, closer to the pre-pandemic level of 3.5%. Economists had forecast 390,000 new jobs and a 3.9% unemployment rate. Job gains for December and January were revised upward by 92,000.

Hourly wage gains slowed from the prior month and failed to keep up with inflation. Wages grew 5.1% in the year through February — down from the prior month’s 5.5% gain.

Charlie Ripley, senior investment strategist for Allianz Investment Management, said in a commentary that the report shows employers were able to attract workers back into the labor force.

“Looking into the details, job additions were broad based and payrolls in pandemic-affected sectors rebounded as expected,” Ripley said. “No matter how you slice the report, the results look very strong from all angles. From the Fed’s standpoint, today’s report crystallizes the need for the Fed to begin the rate hiking campaign with policy rates.”

The yield on the 10-year Treasury note slid 9 basis points to 1.74%.

Oil And Gold Surge

The price of U.S. crude oil rose 3.9% to $111.94. The Energy Select Sector SPDR ETF (XLE) rose 1.5%.

The price of a gold rose 1.5% to $1,965. The SPDR Gold ETF (GLD) also jumped 1.3% Friday.

Commodity stocks gained, with CF Industries (CF) and Cleveland-Cliffs (CLF) each gaining more than 3%.

Gap (GPS) sprang up at the open, but reversed lower, after the apparel retailer beat profit expectations and gave a positive outlook. JPMorgan Chase raised its price target on Gap to 20 from 17, but Credit Suisse cut it to 16 from 20.

Costco (COST) fell 1.7% Friday afternoon after the membership store chain beat sales and profit expectations late Thursday. Sales rose 16% to $50.94 billion. Adjusted earnings climbed 15% to $2.92 a share, excluding premium Covid-related wages in the year-ago period. Adjusted same-store sales jumped 11.1%.

Railroad Stocks Jump

Union Pacific (UNP) jumped into its buy range off a tightly wound flat base, above its 256.21 buy point. By early afternoon Friday, the railroad company’s shares were up 3%.

The relative strength line had already been making new highs. Union Pacific may benefit from the need to transport crude oil produced across the U.S. as a global supply crunch possibly gets exacerbated by the Russia-Ukraine war.

Other railroad stocks also posted gains. CSX (CSX) jumped nearly 5% as it closed in on a buy point of 38.11 off a flat base. Norfolk Southern (NSC) gained 4%.

Ranger Oil (ROCC) broke out from its base into a buy range, jumping nearly 4% on Friday. The chart could be interpreted as a cup base with a 35.41 buy point, according to MarketSmith analysis.

The oil stock has been holding above its 50-day moving average. ROCC ranked 33rd in its industry group, although it has a strong IBD Composite Rating of 95.

The Innovator IBD 50 ETF (FFTY) slid 0.9%.

Follow Michael Molinski on Twitter @IMmolinski

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