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Dow refuses to end the week Russia, Ukraine about the mountain

The Dow Jones Industrial Average ended its fourth week of losses and bond yields saw the biggest drop in yields in a week since March 2020, when Russia’s military campaign in Ukraine intensified.

Friday’s moves limited the last week, with huge changes in currencies and stocks around the world, and commodity prices rose the most in decades. Many traders tried to understand the impact of sanctions and subsequent changes on exchanges and financial companies around the world after the Russian economy was taken out of the world.

The Dow fell 179.86 points or 0.5% on Friday to 33614.80, down 1.3% on the week. The S&P 500 fell 34.62 points to 0.28% from 4328.87. The Nasdaq Composite was down 224.50 points, or 1.7% from 13313.44. The S&P 500 and Nasdaq lost 1.3% and 2.8% this week, respectively.

Shares of other banking and financial services companies fell, and energy companies made big profits. Western Petroleum OXY 17.59%

It has gained 45% this week, while Chevron has gained 13%.

In the US, a sharp rise in commodity prices has raised concerns about economic growth at a time when prices are already at a 40-year high.

Brent crude oil prices rose 25% in the previous month to $ 118.11 this week, closing at its highest level since 2013. The future of corn has had its biggest weekly gain since 2008. Wheat prices had their best week since at least 1959. .

“It’s starting to slow down a bit,” said Anwiti Bahuguna, senior manager of the Columbia Threadneedle portfolio, referring to the combination of quiet economic growth and high inflation. “We keep inflation longer and growth takes a turn for the worse.”

Goldman Sachs Group analysts said Thursday that higher oil and gas prices are “the biggest risk to inflation in the United States” and higher commodity prices threaten economic growth. Rising crude oil prices could lead to a slowdown in GDP growth as consumers push back on spending because of higher gas prices. Investors for much of the week were focused on the sharp rise in oil prices.

“It looks like it’s going to go a little higher from now on, and it’s just a matter of figuring out how much higher,” said Tom Reilly, TP ICAP Group’s energy derivatives broker.,

depending on the price of oil, he added that there have been some sleepless nights for traders in the last week. “People wake up every two hours and check things out to make sure things aren’t too far away.”

Rising oil prices and slower economic growth have also prompted investors to invest in safer investments, such as government bonds, and gold prices have risen to a peak since 2020.

The yield on the benchmark 10-year U.S. Treasury bill fell to 1.722% as bond prices rose the most in one week since March 2020. Bond yields have skyrocketed over the course of the week as investors have controlled the Russian invasion, with Federal Reserve Chairman Jerome Powell monitoring his comments and economic data.

The strong number of jobs at the beginning of Friday was not enough to raise the main indexes or stop the decline in bond yields.

New data on Friday showed that the U.S. added 678,000 jobs in February, more than the 440,000 expected by economists surveyed by The Wall Street Journal. The Federal Reserve stated at its March meeting that it is on track to raise its interest rate by a quarter of a percent, removing short-term uncertainty about interest rates.

“The jobs report was strong,” said Amy Kong, investment director at Barrett Asset Management. But “it’s not going to change the Fed’s position,” he said.

The Stoxx Europe 600 benchmark index fell 7% this week, the biggest weekly decline since March 2020. It has closed at the lowest level in about a year as a result of concerns that Europe will bear the brunt of the Russia-Ukraine economic impact. crisis. The Russian invasion of Ukraine has boosted demand for cryptocurrencies in both countries, raising the price of bitcoin.

The week was a frantic trade for Russia-linked exchange-traded funds. The New York Stock Exchange stopped trading on some Russian-linked exchange-traded funds after a similar move with Russian shares listed on the NYSE earlier this week. Index Providers went on to remove Russian shares from effective indices. The Russian central bank kept the Moscow stock exchange closed for the fifth day in a row, protecting local shares from potential sell-off.

Earlier this week, Euroclear, a clearing house operator, stopped clearing investors of ruble-denominated securities trading, and its competitor, Clearstream, said it would stop liquidating various Russian-related shares and bonds, leaving some traders in the dark about their positions.

The Russian ruble fell again, falling 5.8% against the green card in the last trade, and was the worst week since 1998. The WSJ Dollar Index, which measures the currency against another 16 basket, rose 0.4%.

Despite volatility around the world, shares in New York have been fairly strong amid the conflict. The S&P 500 is above the levels recorded when Russia invaded Ukraine last week.

“The US is less vulnerable than you would see in Europe in the face of the Russia-Ukraine crisis,” said Seema Shah, chief global strategist at Global Investors. For now, he said: “The market is looking up [the situation] and to say that the US economy is strong. ”

However, weekly losses pushed the S&P 500 to almost 10% of its height, and the Nasdaq is now down 17% from its last high.

Traders are trying to assess how much the crisis in Ukraine will spur growth and inflation.


Photo:

BRENDAN MCDERMID / REUTERS

In corporate news, shares of Smith & Wesson Brands fell $ 2.24 or 13% to $ 15.65, after the arms maker reported sales of more than 30% in the holiday quarter.

Shares in Asia fell, partly reflecting Thursday’s Wall Street action, where technology shares were sold more than in the broader market and stumbled by U.S.-listed Chinese companies. Japan’s Nikkei closed 225 2.2% lower on Friday. The Hong Kong Hang Seng Index fell 2.5% to its lowest close since March 2020.

-Joe Wallace and Alexander Osipovich contributed to this article.

The United States and its allies have imposed severe sanctions on Russia. WSJ’s Shelby Holliday delves into how these punishments affect everyone, President Vladimir Putin, to ordinary Russian citizens. Photo: Pavel Golovkin / Associated Press

Write to Gunjan Banerji at gunjan.banerji@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com

Corrections and amplifications
Anwiti Bahuguna is a senior portfolio manager at Columbia Threadneedle. An earlier version of this article misspelled Bahuguna’s last name. (Corrected March 4)

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Dow refuses to end the week Russia, Ukraine about the mountain

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