Wall Street Drops As Ukraine Worries Eclipse Strong Jobs Data

Wall Street's main indexes fell in a broad decline on Friday as the intensifying war in Ukraine overshadowed an acceleration in jobs growth last month that highlighted the strength of the U.S. economy.

Nine of the 11 major S&P sectors declined, with financials falling the most. The broader banks index extended its loss for the week to 8.7%, putting it on course for its biggest weekly drop since June 2020. US/]

Equities globally were weaker and safe-havens in demand as Russian invasion forces seized Europe's biggest nuclear power plant in what Washington called a reckless assault that risked catastrophe.[MKTS/GLOB]

Amazon.com Inc, Apple Inc, Google owner-Alphabet Inc and Microsoft Corp all slipped more than 1%, while Nvidia Corp's 3% drop weighed the most on the S&P 500 and the Nasdaq indexes.

Richly valued growth stocks have faced the brunt of the selloff so far this week, with the S&P 500 growth index down 2%. Its value counterpart has recorded a smaller fall of 0.9%, thanks to support from soaring energy shares.

The crisis, however, boosted energy stocks as crude prices rallied on the back of Western sanctions against Russia, a major oil producer. The S&P 500 energy sector gained 0.6% and looked set to end the week with gains of nearly 7%.

"There's a huge overhang, generally speaking, with uncertainty that's fueled from a war zone and that is unlikely to be resolved anytime soon," said Johan Grahn, head of ETF strategy at AllianzIM in Minneapolis.

"You saw a good jobs report and it just cemented the path that Powell has laid out. He is finding the data points that will support the 25 basis point hike in March, and you can build that puzzle and it's the safer path for the Fed."

The Labor Department's closely watched employment report showed jobs grew by a more than expected 678,000 last month and that the unemployment rate fell to 3.8%, the lowest since February 2020.

Federal Reserve Chair Jerome Powell said this week he would support a 25-basis-point interest rate increase at the central bank's March 15-16 policy meeting and would be "prepared to move more aggressively" later if inflation does not abate as fast as expected.

The commodity price surge spurred by the sanctions against Russia has raised fears of even higher inflation, which could prompt the Fed to hike interest rates aggressively.[O/R]

At 12:31 p.m. ET, the Dow Jones Industrial Average was down 268.83 points, or 0.80%, at 33,525.83, the S&P 500 was down 42.35 points, or 0.97%, at 4,321.14, and the Nasdaq Composite was down 197.30 points, or 1.46%, at 13,340.64.

The tech-heavy Nasdaq was down 2.5% for the week, the most among the three main indexes, while the blue-chip Dow eyed its fourth straight weekly fall.

The CBOE volatility index, also known as Wall Street's fear gauge, rose and was last trading at 32.99.

"That's pretty high. That means there's activity on both sides, so it's not as if there's this huge rush of momentum in a bearish or bullish way," said Liz Young, head of investment strategy at SoFi.

Gap Inc fell 2.4% even as the apparel retailer forecast upbeat 2022 earnings.

Declining issues outnumbered advancers for a 3.02-to-1 ratio on the NYSE and a 3.22-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and 25 new lows, while the Nasdaq recorded 24 new highs and 323 new lows.