Wall Street Ends Sharply Lower As Ukraine Crisis Sows Fear

Wall Street ended sharply lower on Tuesday, with financial stocks bearing much of the damage for a second straight day as the Russia-Ukraine crisis deepened and stirred anxiety among investors.

Ten of the 11 S&P 500 sector indexes fell, led by financials, down 3.7%.

Wells Fargo tumbled 5.8% and the broader banks index declined 4.8% as U.S. 10-year Treasury yields slumped to five-week lows amid a flight to safe-haven debt. [US/]

Chevron Corp jumped 4% to close at its highest level ever after the company raised its share buyback program and forecast for operating cash-flow through 2026, and as oil prices surged. [O/R]

The energy index rose about 1%.

Russia warned Kyiv residents to flee their homes and rained rockets on the city of Kharkiv as Russian commanders intensified their bombardment of Ukrainian urban areas in a shift of tactics after their six-day assault stalled.

The conflict has drawn sharp reprisals from the West including the blocking of certain Russian lenders' access to the SWIFT international payment system.

"Investors are swimming in a soup of fear, and they don't know how to incorporate geopolitical news into their pricing," said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. "We're dealing with a pure emotional investor response."

The Dow Jones Industrial Average fell 1.76% to end at 33,294.95 points, while the S&P 500 lost 1.55% to 4,306.24.

The Nasdaq Composite dropped 1.59% to 13,532.46.

The Philadelphia Semiconductor Index dropped 3.6%, with Advanced Micro Devices tumbling 7.7%.

Trading was busy. Volume on U.S. exchanges was 14.9 billion shares, compared with a 12.3 billion average for the full session over the last 20 trading days.

On a positive note, data showed U.S. manufacturing activity picked up more than expected in February as COVID-19 infections subsided, while construction spending surged in January.

"Given the fact that the U.S. economy is accelerating, the uncertainty will be relatively short lived and it wouldn't be a surprise if the market found its footing sometime over the next couple of weeks when clarity is restored," said Jeff Schulze, investment strategist at ClearBridge Investments.

Target Corp jumped 9.9% after the big-box retailer forecast 2022 sales and profit above analysts' expectations.

Defense stocks added to recent gains, with Lockheed Martin Corp and Northrop Grumman rallying over 3%.

The CBOE volatility index, also known as Wall Street's fear gauge, rose to its highest since Feb. 24.

Zoom Video Communications Inc slid 7.4% after it forecast downbeat full-year revenue and profit, signaling a hit from tough competition and lower sign-ups for its core Meetings platform.

The S&P 500 has declined about 10% in 2022, and the Nasdaq has lost about 13%.

Declining issues outnumbered advancing ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 1.80-to-1 ratio favored decliners.

The S&P 500 posted 26 new 52-week highs and 16 new lows; the Nasdaq Composite recorded 40 new highs and 150 new lows.