Stock Market Closes Down For Fourth Day In A Row As Ukraine Tensions Escalate

For the fourth day in a row, the stock market closed lower, falling deeper into a slump. Tech stocks led the downside as investors remained on edge over the potential war in Ukraine. Some investors moved into gold stocks as a safe haven.

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What started as a minor downturn deepened over the course of the day, with the Nasdaq falling 2.6% and the Dow Jones Industrial Average down 1.4%, moving further below their 200-day moving averages. The tech-heavy Nasdaq undercut its Jan. 28 low of 13,236.

The S&P 5oo declined 1.8%, closing just above its Jan. 24 low, which it barely undercut during the session. The S&P 500 is now down more than 11% from its Jan. 4 peak. With declines of 10% or more, Wall Street typically considers the index to have gone into a correction.

The Russell 2000 traded down 1.8%. Preliminary data showed volume was lower on the Nasdaq and on the NYSE.

The yield on the 10-year Treasury note rose to 1.99%, after recently spiking above 2% on concerning inflation data.

Tensions, Sanctions Over Ukraine Rock Stock Market

Ongoing geopolitical tensions are contributing to much of the market’s volatility. Indexes fell further on Wednesday after the Kyiv government declared a state of emergency and called up reservists. Russian President Vladimir Putin continues to build up his army for an invasion.

Earlier this week, Russian troops advanced into parts of eastern Ukraine. Putin declared those regions as independent states.

Meanwhile, President Joe Biden announced additional sanctions on Russia, this time targeting the building of Russia’s Nord Stream 2 gas pipeline.

“Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers,” Biden said in a statement Wednesday. “These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine.”

Amazon (AMZN) fell 3.6%. Microsoft (MSFT) and Apple (AAPL) fell 2.6%.

Cisco (CSCO) dropped 3.3% and Home Depot (HD) fell 2.4%. Cisco went back below its 200-day line, a bearish sign, while Home Depot continued its fall after a big sell-off on Tuesday despite reporting better-than-expected earnings and sales. Home Depot shares remain well below the 200-day line.

Market Breaks Lows With Russia ‘Ready To Go’; Time To Sell Tesla Stock?

Gold Stocks Up As Threat Of War Rises

The Innovator IBD 50 ETF (FFTY) dropped more than 2.4%, hindered by a 21% loss for Boise Cascade (BCC). The stock plummeted below its 21-day and 50-day lines after reporting earnings late Tuesday. Shares of Boise were previously extended from a 71.90 entry but triggered the 7% sell rule after Wednesday’s losses.

But there were patches of upside. Gold and silver miners led the upside. Sibanye-Stillwater (SBSW) and SSR Mining (SSRM) rose 3.8% and 9.5%, respectively. Natural resource stocks have been showing strength and are a potential safe haven in the midst of a potential war in Europe.

SSR Mining reported fourth-quarter results early Wednesday. The stock is now less than 1% away from a 20.15 buy point in a three-month cup pattern. Meanwhile, the stock’s relative strength line is hitting a new high, a bullish sign. SSR’s earnings fell 6% vs. a year earlier to 44 cents a share amid a 10% rise in sales to $408 million.

Dow Jones stock Chevron (CVX) gained of 2.4%. The stock has been holding above its 21-day line since before the recent market volatility and is showing relative strength. The RS line is nearing new highs.

While most S&P sectors fell, Energy Select Sector SPDR (XLE) rose over 1%. U.S. crude oil traded slightly higher to $92.32 a barrel.

Earnings News In Stock Market

Palo Alto Networks (PANW) gained 0.4% after the cybersecurity company’s results topped expectations. January-quarter adjusted earnings rose 12% to $1.74 a share. Sales including acquisitions rose 30% to $1.31 billion. Guidance was modestly above views.

Overstock.com (OSTK) soared more than 20% after the online retailer’s fourth-quarter results topped expectations. Also, Intercontinental Exchange (ICE) said it is investing in TZero, a broker-dealer that is 80% owned by Overstock.com. TZero enables the trading of digital securities also known as Security Token Offerings. Overstock.com’s rally comes after the stock had plummeted to a July 2020 low.

Lowe’s (LOW) trimmed gains to just 0.2% after the home-improvement chain beat January-quarter expectations and raised its full-year guidance above analysts’ views. The company expects earnings for the fiscal year of $13.10 to $13.60 a share, above its prior guidance of $12.25 to $13 a share. It forecast sales of $97 billion to $99 billion. Lowe’s shares are trying to bounce off the 200-day moving average.

Follow Michael Molinski on Twitter @IMmolinski

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