Wall Street Falls As Ukraine Fears Eclipse Solid Jobs Data

Wall Street fell at the end of a volatile week on Friday as the war in Ukraine overshadowed an acceleration in U.S. jobs growth last month that pointed to strength in the economy.

Most of the 11 major S&P sector indexes declined, with financials falling the most, with a loss of 2.6%. The banks index fell 4.2%, extending its loss for the week to about 9% as investors worry about how the West's sanctions against Moscow may affect the international financial system. [US/]

Equities globally were weaker, with safe-haven assets in demand after Russian forces seized Europe's biggest nuclear power plant in what Washington called a reckless assault that risked catastrophe.[MKTS/GLOB]

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.

"Three or four weeks ago, we would have thought that this is an incredibly important number. But given the backdrop and the overall events that are happening in Europe, it's just not," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte.

"The potential for escalation in the hot war, the potential for a growth impact in Europe and more broadly, and knock-on effects on the commodity channel and inflation are taking up all of investors' time and energy," Hill said.

Amazon.com Inc, Apple Inc, Google owner-Alphabet Inc and Microsoft Corp all slipped more than 1%. Nvidia Corp tumbled 4.4%.

The crisis in Ukraine 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 1.4% and looked set to end the week with rise of nearly 8%.

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

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.

Soaring commodity prices spurred by sanctions against Russia have raised fears of even greater inflation, which could prompt the Fed to hike interest rates more aggressively.[O/R]

In afternoon trading, the Dow Jones Industrial Average was down 1.12% at 33,416.32 points, while the S&P 500 lost 1.27% to 4,308.08.

The Nasdaq Composite dropped 1.93% to 13,276.72.

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

Gap Inc fell 1% even as the apparel retailer forecast upbeat 2022 earnings.

Declining issues outnumbered advancing ones on the NYSE by a 2.61-to-1 ratio; on Nasdaq, a 2.97-to-1 ratio favored decliners.

The S&P 500 posted 33 new 52-week highs and 25 new lows; the Nasdaq Composite recorded 29 new highs and 353 new lows.