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U.S. Stocks Slide as Russia-Ukraine Tensions come to Boil

  • U.S. closes Kyiv embassy, prompting sell-off
  • All 11 S&P sectors turn red; financials down most
  • COVID vaccine makers slide
  • Indexes down: Dow 1.10%, S&P 1.04%, Nasdaq 0.72%

NEW YORK, Feb 14 (Reuters) - Wall Street indexes turned sharply lower on Monday, as news that the United States is closing its Kyiv embassy in Ukraine heightened geopolitical tensions and prompted a sell-off in choppy trading.

All three major indexes fell after the Wall Street Journal reported on the relocation of U.S. diplomatic operations to western Ukraine, in a possible harbinger of imminent Russian invasion.

Ukraine President Volodymyr Zelenskiy urged state officials, politicians and business leaders who have recently left the country to return within 24 hours to show unity. "We have been told that February 16 will be the day of the attack, but we will make it the day of unity," he said.

"Investors don't like uncertainty, and this is obviously a period of increased uncertainty and that's why you're seeing this volatility," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Geopolitical anxieties have been simmering in recent weeks as negotiators scrambled to find a diplomatic path forward as Russia amassed troops along the Ukrainian border.

Adding to the uncertainty were increasingly hawkish comments from St. Louis Federal Reserve President James Bullard, reiterating his call for a faster rake hike timeline and saying the central bank's "credibility is on the line" in its battle against rising prices.

"We're contending with two major concerns," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "What are we going to see from the Federal Reserve and what are we going to see from Russia?"

Recent data showed U.S. inflation at its hottest level in decades, ratcheting up concerns that the Fed could begin hiking key interest rates more aggressively than many had anticipated. 

The Dow Jones Industrial Average fell 381.13 points, or 1.1%, to 34,356.93, the S&P 500 lost 46.05 points, or 1.04%, at 4,372.59 and the Nasdaq Composite dropped 99.62 points, or 0.72%, to 13,691.53.

Fourth-quarter earnings season is approaching the home stretch, with 358 of the companies in the S&P 500 having reported. Of those, 78% have beat consensus estimates, according to Refinitiv data.

NVidia Corp and Walmart Inc are among the high profile companies posting results this week.

COVID vaccine makers Pfizer Inc, Moderna Inc, Johnson & Johnson and Novavax Inc were down between 2% and 12.8%%. 

"The primaries are coming, and governors are reducing mask mandates and people think the crisis is over," Pavlik said.

Declining issues outnumbered advancers on the NYSE by a 3.75-to-1 ratio; on Nasdaq, a 2.70-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 18 new lows; the Nasdaq Composite recorded 22 new highs and 220 new lows.

Reporting by Stephen Culp; additional reporting by Devik Jain and Susan Mathew in Bengaluru; Editing by Richard Chang

Source: Reuters

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