US stocks: Wall Street falls as S&P suffers biggest quarterly decline in two years

NEW YORK: US stocks Plunged to end the first quarter on Thursday with the biggest quarterly decline in two years amid continued concerns about the ongoing conflict in Ukraine and its inflationary impact on prices and the Federal Reserve’s response.

While optimism over a possible peace deal between Ukraine and Russia helped boost stocks earlier in the week, hopes quickly evaporated and Russia’s President Vladimir Putin on Thursday threatened to halt deals that supply Europe with a third of its gas, unless paid in rubles while Ukraine prepares for further attacks.

The United States imposed new sanctions linked to Russia, and US President Joe Biden ushered in the biggest-ever release of the country’s emergency oil reserve, urging oil companies to drill more to slash gasoline prices, which were hit during the war of Ukraine have skyrocketed.

Stock prices have been sensitive to signs of progress towards a peace deal between Russia and Ukraine. US inflation, already high, has worsened since the beginning of the war with rising commodity prices such as oil and metals.

As prices rise, the Fed is more likely to become more aggressive in raising interest rates to fight inflation, potentially slowing economic growth.

Data on Thursday showed that consumer prices rose little in February as price pressures mounted, while personal consumption (PCE) spending excluding food and energy rose 0.4%, in line with expectations.

“The PCE number came out today which is the Fed’s preferred number and while that was exactly the target it was higher than last month and the feeling is that it will continue to rise so you see some weakness” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Fla.

“It only cements the position of (Fed Chair) Jay Powell and the Fed to be more aggressive so there will be multiple 50 basis point hikes.”

the Dow Jones The industrial average fell 550.46 points, or 1.56%, to 34,678.35, the S&P 500 lost 72.04 points, or 1.57%, to 4,530.41 and the Nasdaq Composite fell 221.76 points, or 1.54%, to 14,220.52.

While the S&P endured its worst quarter since the 2020 COVID-19 pandemic hit the United States, stocks recovered somewhat in March.

For the quarter, the S&P 500 fell 4.9%, the Dow 4.6% and the Nasdaq 9.1%, but for the month the S&P 500 was up 3.6%, the Dow 2.3% and the Nasdaq down 3.4%.

Investors will look to Friday’s jobs report for further confirmation of job strength and a glimpse of the possible path for the US Federal Reserve’s monetary policy.

All 11 major S&P sectors were lower, with financials and communications services among the weakest during the session.

Energy, easily the best-performing sector this year, up about 38% so far, slipped as oil prices fell on Biden’s announcement while OPEC+ held on to its existing output deal. The rise secured the sector its biggest quarterly gain on record.

Drugstore chain Walgreens Boots Alliance plunged 5.67% after the company kept its 2022 forecast for low-single-digit earnings growth unchanged.

Volume on US exchanges was 12.08 billion shares, compared to the average of 13.9 billion shares for the entire session over the last 20 trading days.

Declining issues predominated on the NYSE by a ratio of 1.61 to 1; on the Nasdaq, a 1.74 to 1 ratio favored decliners.

The S&P 500 posted 53 new 52-week highs and eight new lows; the Nasdaq Composite posted 57 new highs and 103 new lows. US stocks: Wall Street falls as S&P suffers biggest quarterly decline in two years

Adam Bradshaw

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