Indices slide after quite a solid start

NEW YORK (dpa-AFX) – The escalating conflict between Russia and Ukraine had a stronger grip on the US stock markets on Tuesday than initially thought. After the long weekend, the indices got off to a better start than long feared, but over the course of the day they slipped back into the red. The Dow Jones Industrial recently lost 1.87 percent to 33,440.25 points and thus headed for the January low of 33,150 points, which was still under the impression of interest rate fears.

After two gloomy weeks, investors remained concerned about the future development of the Ukraine conflict. The day before, Russian President Vladimir Putin had recognized the self-proclaimed People’s Republics of Luhansk and Donetsk as sovereign countries against international protests and has now obtained permission from parliament for the deployment of Russian troops. So far, some countries have countered this with announcements of sanctions.

The tech-heavy Nasdaq 100 , which was even up at times in early trading, recently lost 1.80 percent to 13,756.80 points. The market-wide S&P 500 lost 1.66 percent to 4276.80 points.

At first, it was said that bargain hunters would grab stocks again. However, experts did not want to give the all-clear. “In the short term, this conflict represents a significant stress factor for the stock markets,” stated analyst Frank Wohlgemuth from the National Bank. In the past, political stock exchanges have often proved to be short-lived. Whether this will be the case again cannot be answered seriously. A solution to the conflict is not in sight.

On the company side, the current business development of Home Depot was the focus of investors in the Dow, which was clearly negative, to the chagrin of investors. The do-it-yourself boom gave the hardware store group another record year, but the shares widened their minus with the market to almost ten percent recently. The losses were justified with a meager outlook for the hardware store chain.

On the Nasdaq stock exchange, AMD shares were still quite positive with an increase of 0.6 percent. There was a rare buy recommendation from the analysts at Bernstein Research. After a break of almost ten years, an “outperform” is appropriate again, emphasized analyst Stacy Rasgon in his study. The papers of the semiconductor group are valued as cheaply as they have not been for five years.

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Meanwhile, US department store chain Macy’s was unable to defend its early gains, most recently slipping almost 5.7 percent into the red. It did not help in the long term that the department store group remained on course for recovery after the severe business slump in the corona pandemic.

Meanwhile, there was a particularly large price increase for the papers of Houghton Mifflin Harcourt, which shot up by 15 percent. The financial investor Veritas Capital wants to take over the publishing company, which specializes in education and science, for 2.8 billion US dollars in cash.

While shares of competitor Airbus rose in Europe, those of Boeing in New York fell 5.2 percent. Airbus announced that it would be testing an engine for its planned hydrogen aircraft – an idea for future aircraft propulsion that Boeing was recently skeptical about.

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