After coming under pressure early in the session, stocks have seen further downside over the course of the trading day on Monday. With the drop, the major averages are extending the downward move seen over the two previous sessions.
Currently, the major averages are just off their lows of the session. The Dow is down 627.15 points or 1.9 percent at 32,987.65, the Nasdaq is down 330.02 points or 2.5 percent at 12,983.42 and the S&P 500 is down 96.28 points or 2.2 percent at 4,232.59.
Concerns about the impact of the recent surge in oil prices continues to weigh on Wall Street, with crude for April delivery spiking as high as $130.50 a barrel overnight.
The price of crude oil has given back some ground after reaching its highest level since July 2008 but is currently soaring $5.06 to $120.74 a barrel.
The continued jump in oil prices comes as Secretary of State Antony Blinken said on NBC’s “Meet the Press” on Sunday that the U.S. and European partners are in “active discussions” about banning the import of Russian oil in response to the country’s invasion of Ukraine.
Higher crude oil prices are already impacting prices at the pump, with AAA saying the national average for a gallon of gas has reached a fourteen-year high of $4.065.
The increase in gas prices is likely to weigh on consumers, who are already grappling with higher prices due to elevated inflation.
This all comes as the Federal Reserve prepares to raise interest rates by at least a quarter point at its monetary policy meeting next week.
Airline stocks are turning in some of the market’s worst performances amid concerns about higher fuel prices, with the NYSE Arca Airline Index plummeting by 10.1 percent to its lowest intraday level in well over a year.
Substantial weakness has also emerged among housing stocks, as reflected by the 4.6 percent nosedive by the Philadelphia Housing Sector Index.
Banking stocks are also extending a recent sell-off, dragging the KBW Bank Index down by 3.6 percent to a five-month intraday low.
Semiconductor, tobacco and brokerage stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.
Meanwhile, oil service stocks are bucking the downtrend amid the continued jump in oil prices, resulting in a 8.7 percent spike by the Philadelphia Oil Service Index.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan’s Nikkei 225 Index plummeted by 2.9 percent, while China’s Shanghai Composite Index tumbled by 2.2 percent.
The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index slumped by 1.3 percent and the German DAX Index plunged by 2 percent.
In the bond market, treasuries are giving back ground after moving sharply higher in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.4 basis points at 1.768 percent.
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