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Wall Street Opens Lower as War Fears Return; Dow Down 330 Pts


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By Geoffrey Smith — U.S. stock markets opened lower on Thursday as fears of war in Ukraine returned to center stage, amid reports of tank fire and the expulsion of a senior U.S. diplomat by Russia. 

Ukraine’s Foreign Minister Dmytro Kuleba was quoted by newswires as saying that two Ukrainian servicemen had been injured by shots fired from breakaway republics in eastern Ukraine, which were set up by Russia in 2014 after its first invasion of the country. Kuleba’s statement followed one from Moscow saying it had expelled the U.S.’s deputy ambassador in Russia, a move labeled by U.S. officials as a “deliberate escalation.”  U.S. President Joe Biden said the risk of a full-blown invasion was “very high.”

The Russian government also issued a rejection of the U.S.’s latest proposals on security cooperation, saying they had failed to meet a central demand regarding Russia’s security guarantees. The Kremlin has been pushing for a commitment that Ukraine will never join the U.S.-led NATO alliance. 

The news compounded nerves already on edge after some disappointing forecasts from a handful of market darlings including chipmaker Nvidia (NASDAQ:NVDA) and lithium miner Albemarle (NYSE:ALB).

By 9:50 AM ET (1450 GMT), the Dow Jones Industrial Average was down 336 points, or 1.0%, at 34,598 points. The S&P 500 was down 1.1% and the Nasdaq Composite was down 1.2%.

Nvidia stock, one of the star performers of recent years, fell 6.9% after the chipmaker said that the surge in demand for its chips wouldn’t result in higher operating margins in the current quarter. Some analysts expressed concern that its exposure to crypto miners, who hoard computing power, could be a two-edged sword if the boom in cryptocurrencies cools off. Nvidia stock is now down some 24% from its December peak.

Albemarle stock, meanwhile, fell 17% after it posted a net loss in the fourth quarter, despite sky-high prices for the metal that is integral to most rechargeable batteries. The company’s forecast of around 50% growth in adjusted earnings this year also fell short of expectations. 

There was the familiar sound of a ‘profitless tech’ company going ‘thud’ after reporting quarterly earnings – cloud services company Fastly (NYSE:FSLY) becoming the latest to pay the price for disappointing guidance. Fastly stock fell 30% and is now down some 85% from its 2020 peak. Palantir (NYSE:PLTR) stock also fell 13% after its net loss widened in the fourth quarter.

There was better news from DoorDash, which posted a record quarter for revenue at the end of last year, defying fears that the reopening of restaurants would hurt the food delivery business. DoorDash (NYSE:DASH) stock rose 20%, leading Uber (NYSE:UBER) – which is increasingly a food delivery company rather than a taxi app – up by 2.1% in sympathy.

Earlier, the Labor Department had reported a surprise increase in initial jobless claims to 248,000 last week, a development that most analysts passed off as likely to be a blip. Separate data showed that U.S. housing starts, which have been at their hottest since the subprime boom of 2006 in recent months, cooled slightly in January.

Wall Street Opens Lower as War Fears Return; Dow Down 330 Pts

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