The daily business briefing: February 24, 2022
Stocks dive after Russia invades Ukraine, the U.S. imposes sanctions against company building Nord Stream 2 pipeline, and more
Global stocks plunge after Russia attacks Ukraine
Global stocks dropped sharply early Thursday after Russian President Vladimir Putin announced the start of a military assault against Ukraine, ending months of speculation about an invasion. The United States and its European allies condemned the attack, which they had long warned would trigger severe economic sanctions. London's FTSE 100 dropped 2.5 percent. France's CAC 40 and Germany's DAX fell 4 percent. Russia's main index crashed, falling 45 percent. In Asia, Hong Kong's Hang Seng Index fell 3.2 percent. Japan's Nikkei and China's Shanghai Composite were down 1.8 percent and 1.7 percent, respectively. In the United States, Dow Jones Industrial Average and S&P 500 futures were down 2.5 percent at 6:30 a.m. ET. Nasdaq futures were down 3 percent.
U.S. imposes sanctions on company building Nord Stream 2 pipeline
The Biden administration on Wednesday imposed sanctions on the company behind the Nord Stream 2 pipeline being built to transport natural gas from Russia to Germany, strengthening economic penalties for Russia's escalation of the Ukraine crisis. Nord Stream 2 has not started operating, and Germany on Tuesday halted the certification of the project in response to Russian President Vladimir Putin's decision to recognize the independence of two separatist enclaves in eastern Ukraine and send in Russian troops as "peacekeepers." The sanctions target Nord Stream 2 AG, a subsidiary of the Russian state-owned gas giant Gazprom, and its CEO, Matthias Warnig. The U.S. and the European Union have expressed concerns that Nord Stream 2, which would double gas flow capacity from Russia to Germany, will increase Europe's dependence on Russia for energy.
Oil rises above $100 per barrel for 1st time since 2014
Oil prices jumped by nearly 9 percent on Thursday after Russia invaded Ukraine, pushing U.S. and global benchmarks above $100 per barrel for the first time since 2014. Global benchmark Brent crude was up 8.9 percent and U.S. West Texas Intermediate futures rose 8.7 percent early in the day. Natural gas prices rose by 6.1 percent. Gold, a popular safe haven when investors flee risky assets, rose 3.3 percent. The United States and numerous allies imposed a first wave of sanctions against Russia earlier this week as Russian forces appeared ready to invade and Russian President Vladimir Putin recognized the independence of pro-Russian separatist enclaves in eastern Ukraine. They are expected to unveil a second wave on Thursday.
USPS confirms plan to buy gas-powered trucks despite EPA objection
The U.S. Postal Service on Wednesday finalized its plan to buy up to 148,000 gasoline-powered mail delivery trucks, despite calls from the Biden administration to add more electric vehicles to help fight climate change. The White House Council on Environmental Quality and the Environmental Protection Agency this month urged the USPS to reconsider its proposal to replace its fleet, which calls for spending up to $11.3 billion. The Postal Service plans for 90 percent of the delivery trucks in its new fleet to be gas-powered, and 10 percent electric, resulting in a 0.4 mile-per-gallon improvement over the current fleet's fuel economy. Vicki Arroyo, EPA's associate administrator for policy, said the Postal Service's decision to stick with the plan instead of buying more electric vehicles is a "crucial lost opportunity."
New COVID vaccine 100 percent effective against hospitalizations
European drugmakers Sanofi and GSK announced that their new coronavirus vaccine proved 100 percent effective in preventing COVID-19 hospitalizations in late-stage clinical testing. The drug, which will be named Vidprevtyn, was 58 percent effective at preventing COVID-19 symptoms and 75 percent effective at preventing moderate illness. That's below the efficiency seen in trials of the Pfizer and Moderna vaccines, but the Sanofi vaccine is the first to be tested with more infectious variants, including Omicron, circulating. The companies plan to seek authorization for the two-shot vaccine in the United States and Europe. Their drug is a more traditional vaccine than the mRNA types made by the other companies. It can be stored at refrigerator temperatures and more easily distributed.