After moving mostly lower over the two previous sessions stocks are seeing continued weakness in morning trading on Monday. The major averages have all moved sharply lower on the day.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 370.41 points or 1.1 percent at 33,244.39, the Nasdaq is down 190.12 points or 1.4 percent at 13,123.32 and the S&P 500 is down 51.43 points or 1.2 percent at 4,277.44.
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 jumping $2.79 to $118.37 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 extending a recent sell-off amid concerns about higher fuel prices, with the NYSE Arca Airline Index plummeting by 4.7 percent to its lowest intraday level in well over a year.
Substantial weakness has also emerged among tobacco stocks, as reflected by the 2.1 percent slump by the NYSE Arca Tobacco Index. The index has tumbled to a nearly three-month intraday low.
Networking stocks are also seeing considerable weakness, dragging the NYSE Arca Networking Index down by 1.3 percent.
Ciena (CIEN) has helped lead the sector lower after reporting fiscal first quarter earnings that beat analyst estimates but weaker than expected revenues.
Banking, semiconductor and pharmaceutical stocks have also moved to the downside on the day, while oil service stocks have skyrocketed.
Reflecting the strength in the sector, the Philadelphia Oil Service Index has spiked by 8.5 percent to a two-year intraday high.
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.
Meanwhile, the major European markets have turned mixed after plunging in early trading. While the U.K.’s FTSE 100 Index has risen by 0.3 percent, the French CAC 40 Index and the German DAX Index are down by 0.5 percent and 0.6 percent, respectively.
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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