The Dow Jones Industrial Average retreated amid rising fears a Russia invasion of Ukraine may be imminent. Roku (ROKU) cratered following its earnings report while Ford (F) motored higher on reports of a possible spinoff of its EV unit. General Electric (GE) took a tumble on a profit warning.
Volatility actually slipped, with the Cboe Volatility Index, or VIX, falling 1.4%. Volume was higher on both the New York Stock Exchange and the Nasdaq according to early data. Lower volume is preferable on a down day.
Meanwhile, the yield on the benchmark 10-year Treasury note dipped about six basis points to 1.92%. Oil was marginally lower, with West Texas Intermediate crude down 0.2%.
Ukraine Invasion Fears Grow: This Spooks Investors
The Russians have amassed around 190,000 troops along the Ukrainian border, the most significant buildup since World War II according to the U.S.
President Joe Biden said he believes Russian forces are likely to act “in the coming week”.
“We believe that they will target Ukraine’s capital, Kyiv, a city of 2.8 million innocent people,” he added.
The Russian parliament speaker Vyacheslav Volodin has said they should intervene to stop “genocide” in Ukraine. It comes after U.S. officials warned Russia could conduct a so-called false flag operation as an excuse to take action against its neighbor.
The U.S. Department of Justice issued a warning that American businesses and banks will face likely cyberattacks from Russia.
Investors were trying to reduce exposure to risky assets heading into the holiday weekend given the volatility in Ukraine, according to Oanda senior market analyst Ed Moya.
“Investors are having a hard time holding onto risk as the likelihood that the standoff between the West and Russia will ultimately lead to some ground conflict,” he said in a research note. “U.S. stocks gave up earlier gains after the Russian press confirmed reports of the evacuation of residents from East Ukraine to Russia and then turned negative after reports over an explosion in Donetsk.”
With risk of an invasion seen as high, Moya said Wall Street “will remain jittery until we see a major de-escalation, which now seems unlikely.”
Nasdaq Fares Worst As Tech Stocks Struggle Again
The Nasdaq was the worst-hit major index once again as tech stocks were mauled. While it closed off lows a late rally attempt failed as it skidded 1.2% lower. MercadoLibre (MELI) was a main laggard as it dropped 8.2%.
U.S. Stock Market Today Overview
Last Update: 4:12 PM ET 2/18/2022
The S&P sectors were almost all negative. Only consumer staples, a defensive area, closed in the green. Technology and industrials were the worst performers.
Small caps were also shaken down by the bears, with the Russell 2000 closing down 0.9%.
Growth stocks briefly moved into the green before being slapped lower. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, ended the session down 0.2%.
Dow Jones Today: Intel Crumbles As Cisco Impresses
The Dow Jones Industrial Average gave up more than 200 points as it ended the day well off session highs. It ended up dipping 0.7%.
Cisco Systems (CSCO) impressed with a gain of 2.6%. The stock is benefiting after beating earnings estimates earlier this week.
The stock managed to rally back above its 200-day line due to the strength of the move.
Roku Stock Craters On Earnings
Roku stock was given a battering following an underwhelming earnings report.
It reported late Thursday EPS of 17 cents on sales of $865.3 million in Q4. Wall Street expected earnings of 5 cents per share on sales of $894 million, according to FactSet.
Roku earned 49 cents a share on sales of $649.9 million in the same quarter of the prior year. It blamed higher component prices and supply chain woes.
Roku’s outlook was the big shocker though. Roku guided revenue of $720 million in the current quarter, far below analyst expectations for $750.9 million.
Roku stock ended the session down 22.3%%. It was already trading below its 50-day line but lost further ground on the benchmark.
ROKU is now down more than 50% so far in 2022 and has given up about 29% in the past four weeks alone.
Supply Chain Woes Imperil GE Stock
GE stock, a favorite with investors before a stunning fall from grace, struggled Friday.
It was being punished after warning profits in 2022 could be affected by supply chain issues. It said these are pressuring its health care, aviation and renewable energy businesses.
GE said these issues could be in place through the first six months of the year of 2022.
The company said in a filing that the supply chain headwinds “may continue to partially mask the significant progress we are making across our businesses.”
GE stock closed the day near session lows as it gave up 5.9%. This saw the stock slide below its 50-day moving average.
EV Report Drives Ford Stock Higher
Ford stock was given a boost after Bloomberg reported CEO Jim Farley is looking into whether the company should separate its electric vehicle operations from its internal combustion engine business.
The executive is even weighing whether one of the two businesses should be spun off, according to the report.
The firm refused to be drawn on the speculation. It previously said it has “no plans” to spin off its EV or traditional vehicle businesses
Ford stock ended the session up nearly 3%, but remains rooted below the key 50-day moving average. It has come back down to earth after a stellar 2021.
The Stock Checkup shows earnings are badly lagging stock market performance at the moment.