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Market Snapshot: Nasdaq loses grip on earlier gains, Dow sheds 350 points as investors assess latest Russia sanctions

The Nasdaq Composite Index struggled to hold earlier gains Monday and stocks slumped as markets digest the latest sanctions against Moscow after President Vladimir Putin on Sunday raised Russia’s nuclear alert level in an intensifying attack against Ukraine.

What’s happening

The Dow Jones Industrial Average
DJIA,
-0.97%

fell 336 points, or 1%, to 33,724.

The S&P 500
SPX,
-0.80%

declined 0.7%, or 31 points, to 4,352.

The Nasdaq Composite Index
COMP,
-0.20%

fell 0.2%, or 20 points, to 13,675.

Wall Street ended sharply higher Friday, on hopes of peace talks between Russia and Ukraine — though such hopes appeared dimmer after the weekend. The Dow surged 834.92 points, or 2.5%, to close at 34,058.75, with the blue-chip gauge notching its best daily gain since early November 2020. The S&P 500 rose 95.95 points, or 2.2%, to end at 4,384.65. The Nasdaq Composite added 221.04 points, or 1.6%, to finish at 13,694.62.

For the week, the Dow dipped by less than 0.1% while the S&P 500 rose 0.8% and Nasdaq Composite climbed 1.1%. The S&P 500 and Nasdaq benchmarks wiped out losses from earlier in the week.

Read: ECB says Russia bank subsidiary likely to fail

What’s driving markets

Markets were unsettled again Monday as the U.S. and its allies vowed over the weekend to remove major Russian banks from the SWIFT interbank messaging network, effectively cutting them off from the global financial network. Some experts speculated about runs on Russian banks as the value of the ruble sinks against the U.S. dollar
USDRUB,
+13.37%
.

Tensions between Russia and the West ratcheted even higher Sunday after Putin put Russia’s nuclear forces on red alert in response to what he called “aggressive statements” by NATO. Ukrainian forces continued to put up stiff resistance to Russian invaders, while agreeing to meet with Russia in Belarus for talks, albeit with dimming hopes for a quick resolution to the conflict.

The Central Bank of Russia hiked its key interest rate to 20% from 9.5% and halted stock market trading.

Oil prices continued to rise, with Brent crude
BRNJ22,
+2.88%
,
the global benchmark, breaching the $100-a-barrel mark. European stocks slumped on Monday.

BlackRock Investment Institute’s Wei Li and others said that “we are tactically upgrading equities as we see greater clarity on the Ukraine conflict and reduced risk of central banks slamming the brakes to curb inflation.”

“We believe market expectations of rate hikes have become excessive and have created opportunities in equities,” they wrote in a note. “We downgrade credit, preferring to take risk in equities.”

In economic reports, the U.S. trade deficit jumped 7.1% in January to $107.6 billion and hit a new all-time high for the second month in a row. Meanwhile, a February reading of a Chicago-area purchasing managers index dropped to 56.3 from 65.2.

Atlanta Federal Reserve Bank President Raphael Bostic said he isn’t ruling out a half-percentage point rate increase by the Fed at its March 15-16 policy meeting, due to inflationary pressures, according to Reuters. Fed Chairman Jerome Powell will testify before a House committee on Wednesday and the Senate on Thursday.

Which companies were in focus?

Shares of FirstMark Horizon
FMAC,
+0.01%

were in focus after Toronto-Dominion Bank
TD,
-1.83%

said it was acquiring the U.S. bank for $13.4 billion. FirstMark shares were little changed.

Shares of Teladoc Health Inc. TDOC shot up 10% after the provider of tele-healthcare services said it has teamed up with Amazon.com Inc. Alexa on voice-activated virtual care services. Amazon.com shares rose 0.4%.

How are other assets faring?

The 10-year benchmark Treasury note yield BX:TMUBMUSD10Y fell 11 basis points Monday to 1.88%. Treasury yields and prices move in opposite directions.

The U.S. dollar was up 0.1%, as gauged by the ICE U.S. Dollar Index DXY.

West Texas Intermediate crude
CL.1,
+4.51%

1 rose 3.6% Monday at $94.86 a barrel.

Gold GC00 rose 0.8% to $1,902.90 an ounce.

The Stoxx Europe 600 SXXP traded 0.1% lower, while London’s FTSE 100 UKX was down 0.3%.

In Asia, the Hang Seng HSI in Hong Kong finished 0.2% lower. China’s Shanghai Composite Index SHCOMP closed 0.3% higher, while Japan’s Nikkei 225 Index NIK finished up by 0.2%.

— Mike Murphy contributed to this article.

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