Worries over Ukraine Invasion Pummel US Stocks, Lift Oil Prices

File: Both the Dow and S&P finished at new peaks on Friday and also posted their fourth consecutive weekly gains. AFP/Angela Weiss
File: Both the Dow and S&P finished at new peaks on Friday and also posted their fourth consecutive weekly gains. AFP/Angela Weiss
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Worries over Ukraine Invasion Pummel US Stocks, Lift Oil Prices

File: Both the Dow and S&P finished at new peaks on Friday and also posted their fourth consecutive weekly gains. AFP/Angela Weiss
File: Both the Dow and S&P finished at new peaks on Friday and also posted their fourth consecutive weekly gains. AFP/Angela Weiss

Wall Street stocks tumbled and oil prices surged Friday as White House warnings of a possibly imminent Russian invasion of Ukraine reverberated through financial markets.

Markets lurched during a briefing by US National Security Advisor Jake Sullivan, who said a Russian invasion could "begin at any time," including during the Beijing Winter Olympics, AFP said.

"If a Russian attack on Ukraine proceeds, it is likely to begin with aerial bombing and missile attacks that could obviously kill civilians," Sullivan said. "Any American in Ukraine should leave as soon as possible, and in any event in the next 24 to 48 hours."

Investors had become less worried about an imminent invasion of Ukraine in recent days following Western diplomacy with Russian President Vladimir Putin.

But stocks tumbled after Sullivan's remarks, with the S&P 500 ultimately losing 1.9 percent.

Analysts said the sell-off was likely heightened by the timing just before the weekend, with investors shifting into a "risk-off" mode to reduce their exposure for the two days when there is no trading.

"The Russia-Ukraine tensions have hovered over already shaky investor sentiment," said John Lynch, chief investment officer for Comerica Wealth Management. "Investors have been counting on a diplomatic resolution, but recent developments indicate this may be wishful thinking and therefore, not fully priced into the markets."

Most industrial sectors finished lower on Wall Street following the midday White House announcement.

An exception was energy, with oil giants Chevron and ExxonMobil winning more than two percent as crude prices jumped on worries that stiff sanctions on Russia could prompt the country, a major crude and natural gas exporter, to curtail investment or weaponize their energy assets.

Shares of weapons makers also moved higher, including Lockheed Martin, which gained 2.8 percent and Northrop Grumman, which rose 4.5 percent.

Earlier in Europe, London equities slid after economic data pointed to a December slowdown amid the Omicron variant of Covid-19.

The UK economy grew by a record 7.5 percent last year to rebound from the pandemic crash, but shrank by a modest 0.2 percent in the final month, official data showed.

In the eurozone, Frankfurt and Paris stocks banked lower, mirroring Asia after overnight Wall Street losses.

- Key figures around 2150 GMT -
New York - Dow: DOWN 1.4 percent at 34,738.06 (close)

New York - S&P 500: DOWN 1.9 percent at 4,418.64 (close)

New York - Nasdaq: DOWN 2.8 percent at 13,791.15 (close)

London - FTSE 100: DOWN 0.2 percent at 7,661.02 (close)

Frankfurt - DAX: DOWN 0.4 percent at 15,425.12 (close)

Paris - CAC 40: DOWN 1.3 percent at 7,011.60 (close)

EURO STOXX 50: DOWN 1.0 percent at 4,153.23 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 24,906.66 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,462.95 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: DOWN at $1.1351 from $1.1428 late Thursday

Pound/dollar: UP at $1.3564 from $1.3557

Euro/pound: DOWN at 83.64 pence from 84.29 pence

Dollar/yen: DOWN at 115.48 yen from 116.01 yen

Brent North Sea crude: UP 3.3 percent at $94.44 per barrel

West Texas Intermediate: UP 3.6 percent at $93.10 per barrel



Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.