Russian Invasion Spooks Market

Last week, the market hit some new milestones, but the week ended with some concern. The Nasdaq closed at a new 14-year high, and the S&P closed at a new all-time high. The Nasdaq gained +1.05% for the week; the S&P advanced +1.26%, and the Dow rose +1.36%. The Nasdaq completed its 4th consecutive week of gains, while the S&P notched its 3rd out of 4 weeks. 

However, on Friday of last week, the market make a sharp drop around 2:00 p.m., erasing the gains of the morning session. Several quality stocks were hit hard. The volume was strong for the day, so there was institutional selling coming in to the market. Part of the selling might have been due to profit-taking before the weekend, but the level of selling suggested more was at play.

In the news, the Russian army entered the Ukraine and took control of the Crimea peninsula where they have a warm-water navy base. Given the recent protests in the Ukraine, and the president stepping down, there is uncertainty about the country's future, and there is the potential for a war. These events may have spooked investors on Friday. Some of the economic news was also been weak, especially housing starts.