Indices under more moderate pressure than feared

NEW YORK (dpa-AFX) – The escalating conflict between Russia and Ukraine is holding the US stock markets less in a stranglehold after the long weekend than initially feared. The Dow Jones Industrial was down 0.51 percent at 33,906.78 points after an hour of trading on Tuesday, after pre-market indications had already suggested a slide to below the 33,500 point mark.

After two gloomy weeks, investors seem to have gotten used to some bad news from Eastern Europe. Russian President Vladimir Putin moved Ukraine’s borders again on Monday and, despite international protests, recognized the self-proclaimed People’s Republics of Luhansk and Donetsk as sovereign countries. He also ordered the deployment of Russian soldiers by decree. So far, some countries have countered this with announcements of sanctions.

The tech-heavy Nasdaq 100 even managed to gain 0.14 percent on Tuesday to 14,029.55 points, while the market-wide S&P 500 moved with 4344.47 points with 0.10 percent in the red.

Stockbrokers said that many conflict risks had already been priced in in the past few days, but that possible positive news could quickly brighten the mood again. The strategists at Morgan Stanley believe it is possible that the US markets could quickly pick up by five percent again if there were a de-escalation.

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, investors focused on the current business development of Home Depot in the Dow. The do-it-yourself boom gave the hardware store group another record year, but this did not help the course, nor did a quarterly dividend that was 15 percent higher. Price losses of 6.4 percent were justified with a lukewarm outlook for the hardware store chain.

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On the Nasdaq stock exchange, however, AMD shares were positive with a rise of three 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.

The US department store chain Macy’s topped this with a price increase of 5.2 percent. The department store group remains on course for recovery after the severe business slump in the corona pandemic. In the Christmas quarter, its growth clearly exceeded expectations.

There was a particularly large price increase for the papers of Houghton Mifflin Harcourt, which shot up by more than 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.

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