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Wall Street Opens Higher as Russia, Ukraine Inch Toward Diplomacy; Dow up 580 Pts


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By Geoffrey Smith — U.S. stock markets opened higher on Wednesday on a change in the messaging from Russia and Ukraine that suggested they may be inching toward a negotiated settlement after two weeks of war. 

Russia’s Foreign Ministry dropped what had appeared to be a key element of its war objectives as Foreign Ministry spokeswoman Maria Zakharova said that Moscow doesn’t want to occupy Ukraine or overthrow its government. Later, Ihor Zhovkva, deputy chief of staff to Ukrainian President Volodymyr Zelensky, said that the country was willing to discuss adopting neutral status in return for security guarantees, something that would make the issue of Ukraine joining NATO a moot point. 

By 9:33 AM ET (1433 GMT), the Dow Jones Industrial Average was up 580 points, or 1.8% at 33,213 points. The S&P 500 was up 2.0% and the Nasdaq Composite was up 2.5%.

The improvement in risk appetite was also immediately evident in oil prices, which fell over 5% to their lowest since last Friday. U.S. Crude futures were quoted at $117.50 a barrel, while Brent was at $121.50, a day after U.S. President Joe Biden said the U.S. will ban imports of Russian energy, forcing U.S. buyers to find alternatives on the open market.

Despite all this, the fighting in Ukraine continued unabated, punctuated again by mutual accusations of violating the ceasefires that had been agreed to allow civilians to escape from besieged cities. Unverified social media footage indicated widespread use of cluster bombs and ‘butterfly mines’ by Russian forces against the fleeing population. Nor was there any sign of movement on the key issue of territory, with Russia continuing to demand that Ukraine recognize Russian sovereignty over Crimea and the independence of two breakaway republics in eastern Ukraine that it established eight years ago after its first invasion. Zhovkva said Ukraine “won’t cede one inch of territory.”

Elsewhere, Russia’s government approved a draft bill that would allow it to nationalize the assets closed by Western companies that have ceased or suspended operations in the country due to the war. In the last 36 hours, McDonald’s (NYSE:MCD), Yum! Brands (NYSE:YUM) and Starbucks (NASDAQ:SBUX) have joined that list, as have Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP). 

Early moves essentially reversed the pattern of trading seen in recent sessions, with growth and financial stocks rising and oil and gas stocks falling. Apple (NASDAQ:AAPL) stock rose 2.1% after it held a preview for a new generation of high-end desktops and a revamped iPhone SE, its cheapest smartphone offering. Tesla (NASDAQ:TSLA) stock meanwhile rose 2.3%, shrugging off concerns about the explosive rise in prices for nickel, a key battery metal.

Oil majors by contrast gave up some of their windfall gains. Exxon Mobil (NYSE:XOM) stock fell 2.8%, while Chevron (NYSE:CVX) stock fell 1.8% and Occidental (NYSE:OXY) stock fell 0.7%. 

Coinbase (NASDAQ:COIN) stock rose 10% after the White House issued an executive order on digital currencies that appeared to allow a regular pathway into the financial mainstream for them.

Elsewhere, Macy’s (NYSE:M) stock rose 4.8% after the struggling department store chain refinanced high-yielding debt at a lower rate, a vote of confidence by creditors in its viability, while Bumble (NASDAQ:BMBL) stock rose 40% after the female-led dating site published quarterly numbers that eased fears about its future.

Wall Street Opens Higher as Russia, Ukraine Inch Toward Diplomacy; Dow up 580 Pts

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