EDITOR'S NOTE
The Dow Jones Industrial Average closed at its lowest level in 2022 so far, as investors ditched riskier assets amid the Russia-Ukraine conflict.
The 30-stock index lost about 464 points. The S&P 500 fell more than 1.8% and now sits nearly 12% from its Jan. 3 record close. The Nasdaq Composite, which also ended the session at its lowest level for the year so far, dropped nearly 2.6%. The tech-heavy index is nearing bear-market territory as it sits more than 18% from its November closing record.
"Uncertainty surrounding the Russia/Ukraine situation continues, the Fed still appears to be on a path to raise rates to fend off inflation, and even after a 10% pullback, valuations remain elevated by many historical standards," said Chris Hussey of Goldman Sachs.
The Dow and Nasdaq also closed below their Jan. 24 intra-day lows.
"The mounting tensions surrounding the Ukraine-Russia conflict suggests there is no quick fix in store," said Kathy Bostjancic, chief U.S. economist at Oxford Economics.
"This props up energy prices which further fuels high inflation and increases the likelihood of further U.S. sanctions against Russia," she said. "The direct economic impact from higher oil prices and general high uncertainty weighs on stock prices." While the S&P 500 is struggling, LPL Financial crunched some numbers and found that the 500-stock average rose nearly 90% of the time a year or two after previous corrections and bear markets since 1950.
"As uncomfortable and frustrating market corrections can be, investors need to remember that future returns after such pain can bring a lot of gains," said Ryan Detrick of LPL Financial.
"With the economy still strong and many signs of over-the-top negative sentiment, we doubt the S&P 500 will move into a bear market (down 20% or more), with a major low likely coming fairly soon," he added.
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