Friday, February 25, 2022
Dow Surges 835 Points as Investors Shake Off Russia-Ukraine Crisis. U.S. stock gauges rallied Friday, marking a second-straight day of powerful gains that erased ugly losses produced earlier in the holiday-shortened week, as investors appeared to respond to apparent positive developments in the conflict in Ukraine. The Dow Jones Industrial Average rose 835 points, or 2.5%, to close at 34,059 and mark the best daily advance since November of 2020. The S&P 500 index rose 96 points, or 2.2%, to 4385. The Nasdaq Composite index rose 221 points, or 1.6%, to end at 13,695. For the week, the Dow ended almost flat, down less than 0.1%, the S&P 500 finished up 0.8%, and the Nasdaq Composite booked a 1.1% gain.
EU and Taiwanese Sanctions Ramp Up Pressure on Russia as Invasion Reaches Kyiv
Sanctions against Russia intensified and support for Ukraine grew Friday as the invasion entered its second day.
Ukraine’s foreign minister Dmytro Kuleba reported “horrific Russian rocket strikes on Kyiv” and called on the world to isolate Russia and sever ties. As world leaders set out plans for sanctions Thursday and into Friday, Ukrainian President Volodymyr Zelensky called for stronger action.
“Not all possibilities for sanctions have been exhausted yet. The pressure on Russia must increase,” he said in a post on Twitter.
Biden Won’t Block Russia’s Use of Swift. What Is It and Why Not?
Russia’s invasion of Ukraine prompted President Joe Biden to announce a slew of sanctions this week. But he held back on one option, seen as among the most damaging nonmilitary actions that that could be taken: cutting off Russia’s access to Swift.
The Belgium-based Society for Worldwide Interbank Financial Telecommunication is a messaging service, set up in the 1970s, that allows financial institutions around the globe to securely communicate with each other. It handles millions of payment instructions a day, allowing money to flow through the financial system.
Fed’s Initial Rate Hike in March Now Seen at Quarter Point Amid Russia Attacks
A Federal Reserve that had been grappling for months with how to curb inflation without hindering the recovery is now being forced to balance a new complication: war in Ukraine.
The fresh dose of instability sparked by Russia’s invasion of Ukraine this week has all but eliminated the possibility that the central bank moves aggressively next month to tighten monetary policy with a half-point interest-rate increase. That step, which just a couple of weeks ago was widely considered a foregone conclusion, is now likely to be a bigger risk than the central bank is willing to take as policy makers wait to see how the conflict develops, economists say.
The New Omicron Subvariant Is More Transmissible. Is the Economy Ready to Reopen?
Even though global coronavirus cases are declining and countries are moving to reopen their economies, the World Health Organization has urged public officials to monitor the spread of a new, highly transmissible Omicron subvariant.
The subvariant, known as BA.2, appears to be up to 30% more transmissible than BA.1, the predominant subvariant. More than 20% of Omicron cases could be traced back to the new subvariant by the fifth week of 2022, the WHO said in a weekly newsletter published in mid-February.
Biden Nominates Ketanji Brown Jackson for Supreme Court
President Biden has tapped Judge Ketanji Brown Jackson as his nominee to replace Supreme Court Justice Stephen Breyer, the White House confirmed on Friday. Jackson is the first Black woman nominated to serve as a Supreme Court justice.
“Today, I’m pleased to nominate Judge Jackson, who will bring extraordinary qualifications, deep experience and intellect, and a rigorous judicial record to the court,” Biden said at a press conference announcing the nomination.
CDC Expected to Ease Covid-19 Mask Rules
The Centers for Disease Control and Prevention could move quickly to ease mask guidelines, according to reports from a number of media outlets.
Current CDC guidelines, which recommend indoor masking nearly everywhere in the U.S., have been roundly ignored in recent weeks. State after state has lifted indoor mask mandates. Hawaii is currently the only state remaining with an indoor mask mandate and no announced plans to lift it.
Completed Settlements Signal Opioid Litigation Is Drawing to a Close
The drawn-out legal effort to hold companies responsible for the U.S. opioid crisis began to come to a close Friday, as Johnson & Johnson and the nation’s three largest drug distributors announced that they would pay a combined $26 billion to settle the majority of the lawsuits they face from state and local governments.
Johnson & Johnson and the three drug distributors—AmerisourceBergen, McKesson, and Cardinal Health—first announced the proposed settlement agreement in July. It could not be completed until enough state and local governments had signed on for the companies to be satisfied that the payments would substantially end the litigation against them.
Consumer Spending Rose in January Even as Inflation Continues to Accelerate
Consumer spending rose more than expected in January, even as inflation continued to accelerate throughout the month to reach another four-decade high, according to new data from the Bureau of Economic Analysis.
Personal consumption increased by $337.2 billion, or 2.1%—significantly more than the 1% growth predicted by economists. Adjusting for inflation, spending rose 1.5%.
GE Dives Into Hydrogen Plane Technology With Airbus
General Electric is diving deeper into hydrogen technology, this time in its aviation division. General Electric, along with Safran, its partner in the CFM venture, and Airbus, announced this week it will test running a huge A380 commercial jet on hydrogen fuel.
“The purpose of the project is to demonstrate the technology,” Massimo Varriani, GE’s European system leader for the hydrogen program, said in a statement. “What is important is that we demonstrate we can fly with an engine that is burning just hydrogen, we have the storage capability of hydrogen in the aircraft, and we have a system that is capable of distributing the hydrogen fuel into the combustor with the proper characteristics.”
Consumer Sentiment Is at a Decade Low. Blame Inflation.
Consumer sentiment sank in February to its lowest level in a decade as consumers grappled with rising prices and the possibility that the Federal Reserve is poised to raise interest rates to curb inflation.
The consumer sentiment survey from the University of Michigan on Friday came in at 62.8. Economists surveyed by FactSet were looking for 61.7, which was the preliminary reading earlier this month. February’s final number was a 6.5% decline from January’s 67.2 reading and an 18% year-over-year decrease.
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