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Wall Street shakes off Fed, Ukraine anxiety as oil dips

Stock MarketsJan 24, 2022 05:01PM ET
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2/2 © Reuters. FILE PHOTO: TV camera men wait for the opening of market in front of a large screen showing stock prices at the Tokyo Stock Exchange in Tokyo, Japan October 2, 2020. REUTERS/Kim Kyung-Hoon 2/2

By Pete Schroeder

WASHINGTON (Reuters) - A tumultuous day on Wall Street saw stocks end higher after posting heavy losses earlier in the day, as uncertainty over rising geopolitical tensions and Fed policy weighed down oil and boosted safe havens.

All three major U.S. stock indices closed the day in positive territory, after the Dow Jones Industrial Average had posted an over 1,000-point decline earlier in the day.

The Dow ended up 0.29%, while the S&P 500 gained 0.28% and the Nasdaq Composite added 0.63%.

The MSCI world equity index, which tracks shares in 45 nations, was down 0.78%.

The late gains marked a surprising turnaround for U.S. stocks, which were battered last week, posting their heaviest losses since 2020. The decline potentially enticed bargain hunters to help push them higher Monday.

"Recent bearishness in equities is overdone, and out of line with activity momentum, easing bottlenecks, and what we expect to be a strong earnings season," wrote JPMorgan (NYSE:JPM) analysts in a midday note.

The market tumult came as NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets in response to Russia's military build-up at Ukraine's borders.

The U.S. State Department on Sunday ordered diplomats' family members to leave Ukraine, while President Joe Biden weighed options for boosting U.S. military assets in the region.

Attention is also turning to the U.S. Federal Reserve, which kicks off a two-day policy meeting on Tuesday. Investors are watching the central bank as closely as ever, as Fed officials look to unwind unprecedented stimulus and begin a path toward future rate hikes.

"Investors are accepting the harsh reality that the end of the ultra-easy monetary policy is upon us. This week the Federal Reserve meets and while we expect no changes at this meeting, the market is pricing in a full quarter point increase in March," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.

The risk-off attitude was evident in oil markets, as prices dipped by as much as 3% after closing Friday with a fifth straight week of gains.

Brent crude fell $1.62, or 1.8%, to $86.27 a barrel, while U.S. West Texas Intermediate (WTI) crude settled down $1.83, or 2.2%, to $83.31. [O/R]

Other riskier assets felt pressure as well. Bitcoin hit a six-month low Wednesday, but was up slightly late Monday to $36,921, still well below the November all-time high of $69,000.

FED TIGHTENING LOOMS

Concerns that the Fed could tighten too quickly at its meeting this week added to investor nerves.

The U.S. central bank is expected to confirm that it will soon start draining the massive pool of liquidity that has supercharged growth stocks in recent years.

Treasury yields were down on most maturities Monday. The benchmark U.S. 10-year yield was flat on the day at 1.7511%, after earlier hitting an 11-day low of 1.7070%.

Fears over the Fed and Ukraine boosted safe haven investments. The dollar hit a two-week high against a basket of currencies, last up 0.26%. Spot gold prices also jumped 0.55% to $1,843.26 an ounce..

Wall Street shakes off Fed, Ukraine anxiety as oil dips
 

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Comments (26)
Todd Gray
Todd Gray Jan 24, 2022 7:59PM ET
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Ukraine's leadership is a bunch of thugs, just like the Russians, and many of ours. The covid narrative is winding down, so media & those politicians needs a new angle to hook our attention.
Dave Jones
Dave Jones Jan 24, 2022 5:40PM ET
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let's pray cooler heads prevail
Bullish Market
Bullish Market Jan 24, 2022 4:00PM ET
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War should not be an option under any circumstances. Only the innocent will be affected, some rich will only get richer. Devastated countries, dozens of immigrants, people suffering from drought, exile, hunger and many more negativity. People should find a way to agree to stop arms race it will not do good to anything. Better products, high efficiency in production and free trade makes our lives better, not fabricated wars.
Max German
MaxiGE Jan 24, 2022 3:49PM ET
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and look now losses are gone
Jon Bal
Jon Bal Jan 24, 2022 2:38PM ET
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no wonder aluminum futures are up. look at all the foil hats in these comments
Stefan Kunco
Stefan Kunco Jan 24, 2022 12:22PM ET
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They feed us well
Phil Ht
Phil Ht Jan 24, 2022 12:00PM ET
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Psychotic leadership
Francis Hi
Francis Hi Jan 24, 2022 11:45AM ET
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Terrorist Putin should have put and short a lot
Kg Rk
Kg Rk Jan 24, 2022 8:15AM ET
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the chinese short of PRC = Pakistan China Russia.. .. no country in the world is better than any other.. imagine a global population of 100000 or so... so called ministers who make laws and decisions on behalf of and ruling a world of roughly 7 billion people .. resistance is must and its natural.. no one should have any control on anyone .. you have right to rule and self govern yourself. you were born naked just like these privileged and elite people
Honey Badger
Honey Badger Jan 24, 2022 6:38AM ET
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NATO did learned anything from 20 years war in Afghanistan and spent trillions.God bless all innocent and faithful
IceIce Baby
IceIceBaby Jan 24, 2022 6:38AM ET
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Don't worry, NATO is not planning to invade any parts of Ukraine.
Junk Man
Junk_Man Jan 24, 2022 6:38AM ET
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NATO learned that war is profitable...
 
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