Wall Street opens lower, recovering from Blinken-induced oil shock; Dow down 250 points By Investing.com

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© Reuters

By Geoffrey Smith

Investing.com — U.S. stock markets opened lower on Monday but were off the lows seen overnight by futures as fears of a squeeze in global oil supplies eased somewhat.

US Secretary of State Anthony Blinken had said on Sunday that the United States was actively discussing with European allies the possibility of imposing a full embargo on Russian oil, essentially putting 10% of the world’s oil supply off limits and sparking a frantic race for alternative supplies.

However, German Chancellor Olaf Scholz said his country would not agree to such a move, arguing that there was no other short-term way to secure Europe’s energy supply. , which had jumped 17% overnight to a new 14-year high of over $130 a barrel, fell back to trade below $120 a barrel at the open on Wall Street. This is still a level that has led in the past to widespread demand destruction and economic slowdown.

As of 9:40 a.m. ET (2:40 p.m. GMT), the was down 253 points, or 0.8%, at 33,362 points. The was down 0.4% and was effectively flat since Friday’s close. All three had posted losses last week.

Sentiment was also marginally improved by the first sign that Russia is moderating its demands on finding a path to peace. Reuters quoted a Kremlin spokesman as saying what he called a “special military operation” could end immediately, even without the replacement of the current Ukrainian government. However, his latest demands – that Ukraine adopt neutrality and recognize the Russian conquest of Crimea and the independence of two breakaway “republics” – are still unacceptable to a Ukrainian government that has been emboldened by the successful defense of almost all major cities across the country and growing signs of dysfunction in the Russian military.

Among the early movers, Bed Bath & Beyond (NASDAQ:) stock stood out with a 63% jump after news broke that Ryan Cohen, the founder of pet food company Chewy (NYSE:), had amassed a stake in the struggling retailer. Cohen has already been welcomed as a savior for GameStop (NYSE:), another retailer trying to move beyond an outdated brick-and-mortar distribution model. However, GameStop stock has struggled to maintain the momentum Cohen gave it last year, when an army of retail investors bought into what they perceived to be his vision for the company. GameStop stock is down 0.6% in early trading and is down 25% so far this year.

However, for the most part, stocks continued to slide on fears of the economic damage that rising global commodity prices and economic boycotts will cause, particularly in Europe, a key market for many U.S. companies. Boeing (NYSE:) stock fell 0.8% after announcing that it would suspend purchases of titanium and titanium products from a joint venture it owns in Russia, a company it is on support for lightweight aircraft components such as the 787 Dreamliner. Problems delivering the Dreamliner due to other production issues may have made this decision easier for the company.

Boeing was joined this weekend by Netflix (NASDAQ:), American Express (NYSE:) and accounting giants KPMG and PwC to withdraw their products and services from Russia, while Visa (NYSE:) and Mastercard (NYSE:) have further reduced the services they will offer in the country. The exodus of Western companies from IKEA to Ford has increasingly turned the spotlight on those who have chosen to continue operating there as normal, such as McDonald’s (NYSE:) and Coca-Cola (NYSE:).

Elsewhere, oil and gas companies continued to outperform on the prospect of windfall profits in the current quarter. Exxon Mobil (NYSE:) the stock rose 2.3% and Chevron (NYSE:) stock rose 0.9%, while Occidental Petroleum (NYSE:) stock rose 3.2% after news broke of Carl Icahn’s exit from his stake in the company, thus removing a long-standing stock surplus. The company is also benefiting from influxes from Warren Buffett Berkshire Hathaway (NYSE:).

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