S&P 500 Falls Into Correction Territory

The S&P 500 moved between gains and losses on Wednesday, a day after falling into correction territory amid escalating tensions between Russia and Ukraine.

The Dow Jones Industrial Average rose about 10 points. The S&P 500 lost about 0.1%, after closing more than 10% from its Jan. 3 record close on Tuesday. The technology-focused Nasdaq Composite was off by about 0.3%.

Some reopening plays like airlines and cruiselines in the red, as well as some technology names. Delta Air Lines lost nearly 2% and Tesla was off by 2.5%.

Retailers were a sea of red with Macy’s down 5% and TJX Companies down more than 7%. Best Buy lost 3% and Nordstrom was down 2%.

Meanwhile, home retailing giant Lowe’s rose more than 4% after beating earnings forecasts and announcing sales rose 5%.

The S&P 500 is in the red for the fourth session in a row as investors have been juggling brewing tensions between Russia and Ukraine.

The Ukraine Ministry of Digital Transformation said Wednesday there was another mass DDoS [denial of service] attack on Wednesday that prevented certain entities from accessing government websites, NBC reported.

On Tuesday afternoon President Joe Biden announced a first tranche of sanctions against Russia. The measures target Russian banks, the country’s sovereign debt and three individuals.

he VanEck Russia ETF, a U.S.-traded security which invests in top Russian companies, dropped more than 7% on Wednesday.

“While uncertainties remain, our work shows that historically military/crisis events tend to inject volatility into markets and often cause a short-term dip, but stocks tend to eventually rebound unless the event pushes the economy into recession,” Eylem Senyuz, senior global macro strategist at Truist, wrote in a note to clients.

“Investor sentiment also suggests the bar for positive surprises is low,” Senyuz added.

Investors are also facing concerns about record inflation and the Federal Reserve’s monetary policy pivot which could result is rate hikes as soon as next month.

Wall Street is betting that there’s a 100% chance of a rate hike at the Federal Reserve’s March meeting, according to the CME Group’s FedWatch tool.

On Tuesday the Dow fell more than 480 points. The S&P 500 shed 1.01%, and ended the session 10.25% below its Jan. 3 record close, putting the broad market index in correction territory. The Nasdaq Composite declined 1.23% for its fourth straight negative session.

Earnings season is also coming to a close. As of Friday 78% of S&P 500 companies that have reported have topped earnings estimates, while 78% have exceeded revenue expectations, according to data from FactSet.