S&P 500 Slips as Russia-Ukraine Tensions Keep Stocks on Rollercoaster Ride

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S&P 500 Slips as Russia-Ukraine Tensions Keep Stocks on Rollercoaster Ride
Credit: © Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Monday, after swinging between gains and losses as investors had to contend with reports suggesting that an imminent Russian attack on Ukraine was on the horizon just as hopes were rising that Moscow was open to a diplomatic resolution.

S&P 500 fell 0.42%, the Dow Jones Industrial Average fell 0.49%, or 171 points, the Nasdaq ended flat.

Fears of an imminent Russian invasion of Ukraine was stoked intraday by a Facebook post from Ukraine President Volodymyr Zelenskyy saying that Ukraine 'has been informed' that Wednesday will be the day of the attack.

The comments from Zelenskyy were later said to have been sarcastic, but this sentiment was lost in translation of the text to English, according to media reports, at time when Russia-Ukraine tensions remain elevated.

CBS reported that Russia had advanced its troops into positions to launch an attack.

In response to the rising tensions, The U.S. State Department moved its embassy staff out of Kyiv to Lviv, amid a “dramatic acceleration in the buildup of Russian forces,” Secretary of State Antony Blinken announced Monday.

The report arrived after Moscow indicated that it was open to progressing with talks find a resolution to de-escalating tensions on the Ukraine boarder.

Russian President Vladimir Putin had earlier signaled his backing for Russia to continue talks with the U.S. and its allies after his Russian Foreign Minister Sergei Lavrov described proposals tabled by Washington as “constructive.”

The U.S. rejected Russia’s overarching demand for guarantees that NATO won’t allow Ukraine to join as a member, but offered to discuss limits for missile deployments in Europe, and restrictions on military drills.

Oil prices, which has served as the barometer of tensions on the Ukraine border given the prospect of potential supply disruptions, were up sharply. The sharp rise in oil prices didn't prevent a more than 2% slide in energy stocks.

APA (NASDAQ: APA ), Marathon Oil (NYSE: MRO ) and Occidental Petroleum (NYSE: OXY ) were leading the decliners.

Tech was a relative out-performer on the day, supported by rising semiconductor stocks.

Micron Technology (NASDAQ: MU ) and Advanced Micro Devices (NASDAQ: AMD ) led the gains up more than 2% and 3% respectively, with the latter announcing that is completed its $50 billion acquisition of Xilinx (NASDAQ: XLNX ).

Splunk (NASDAQ: SPLK ), meanwhile, jumped more than 9% after reportedly receiving a $20 billion takeover bid from Cisco Systems (NASDAQ: CSCO ).

Sentiment on electric vehicle stocks were lifted after Soros Fund Management reported that it bought nearly 20 million shares of EV maker Rivian in the fourth quarter of the year.

Rivian Automotive (NASDAQ: RIVN ) was up 6%, Tesla (NASDAQ: TSLA ) gained about 2%, and Nikola (NASDAQ: NKLA ) added 3%.

Health care stocks were also a drag on the market, weighed down by weakness in vaccine makers as investors head for the exit on concerns that falling Covid-19 cases would dent coronavirus vaccine demand. Inflows into health-care funds have slowed to about $800 million a month, down from a peak of $5 billion a month in early 2020, Bloomberg report.

Novavax (NASDAQ: NVAX ), Moderna (NASDAQ: MRNA ), and Pfizer (NYSE: PFE ) were nursing losses.

In other news, Peloton Interactive (NASDAQ: PTON ) gave up some of its recent gains after the connected fitness equipment company's CEO Barry McCarthy, in an interview with the Financial Times, downplayed the prospect of selling the company.

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