US stocks tumble as Biden announces new Russia sanctions

Traders work on the floor of the New York Stock Exchange, on Feb 22, 2022. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks fell sharply on Tuesday (Feb 22) after United States President Joe Biden announced new sanctions on Russia following its latest escalations in the Ukraine crisis.

Mr Biden, in a White House address, said the penalties on Russia would go “far beyond” existing sanctions and include moves to cut the country off from Western financing by targeting Moscow’s sovereign debt.

The Dow Jones Industrial Average finished down 1.4 per cent, or about 480 points, at 33,596.61.

The broad-based S&P 500 dropped 1 per cent to 4,304.76, while the tech-rich Nasdaq Composite Index slid 1.2 per cent to 13,381.52.

On Monday, Russian President Vladimir Putin defied Western warnings and approved sending troops into eastern Ukraine to support two rebel regions’ independence claims.

The move prompted significant new sanctions outside of Washington, with Germany halting certification of a key natural gas pipeline.

A note from Oanda’s Mr Edward Moya described the Ukraine situation as a threat to markets because of the risk energy costs will “skyrocket”, noting that fears of war in eastern Europe have already caused a market pullback.

“Geopolitical tensions will continue to undermine economic growth and that should keep equities very choppy until the Russia-Ukraine crisis has a clear conclusion and after the financial markets have a firmer handle on how aggressive Fed tightening will be,” Mr Moya said.

Besides Ukraine, markets are also fixated on rising consumer prices, which has prompted a sharp pivot in the Federal Reserve’s monetary policy pronouncements.

On Tuesday, a survey from the Conference Board showed a modest dip in consumer sentiment in February compared with the prior month.

Among companies releasing earnings, Home Depot shares slumped 8.9 per cent even after reporting better-than-expected results and raising its dividend by 15 per cent.

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