By Geoffrey Smith
Investing.com -- U.S. stock markets opened mixed on Tuesday, struggling for direction as both the U.S. and Europe ratcheted up the sanctions pressure on Russia.
On Monday, the U.S. Treasury had confirmed that it will stop Russia from servicing its foreign debt with dollars held in the U.S. banking system, forcing it to draw down reserves at the central bank instead. Earlier Tuesday in Europe, EU leaders proposed their first sanctions on Russian energy, albeit on coal, rather than on the oil and gas exports that bring Russia most of its export earnings. Both measures are relatively modest, incremental steps that reflect still-high levels of reluctance in Europe to accept economic pain as a necessary measure to end the war, even after evidence emerged at the weekend of atrocities committed by Russian troops against Ukrainian civilians.
By 9:45 AM ET, the Dow Jones Industrial Average was up 126 points, or 0.4% at 35,048 points. The broader-based S&P 500 was up by less than 0.1% and the Nasdaq Composite was down by 0.4%, losing some of the sheen it gained on Monday thanks to Elon Musk's announcement of a stake in Twitter (NYSE:TWTR). Twitter stock continued to gain in early dealings, rising 6.4% after the social media giant offered Musk a board seat.
However, the mood darkened after Federal Reserve Governor Lael Brainard indicated that the Fed may start reducing its balance sheet at its next meeting in May, while Kansas City Fed President Esther George warned that the central bank may have to deliberately slow the economy in order to bring inflation down to a sustainable level.
Among early movers, Carnival (NYSE:CCL) stock stood out after the cruise operator said it had had the strongest week for bookings in its entire history. The message also lifted the stock of other cruise operators, who can apparently look forward to a summer of pent-up demand being released after two years of devastation at the hands of Covid-19.
Carnival stock rose 8.5% to its highest in nearly two months, while Norwegian Cruise Line (NYSE:NCLH) stock rose 5.6% and Royal Caribbean (NYSE:RCL) stock rose 3.6%.
Leisure-related services in general have appeared to be benefiting from strong tailwinds in recent days, with employment data signaling a strong hiring trend to cope with resurgent demand. That picture was further fleshed out on Tuesday as the Institute for Supply Management's non-manufacturing PMI broke a sequence of three straight drops, rising to 58.3. The employment subindex rose to 54.0 from 48.5, while the prices subindex rose to equal its all-time high of 83.8, a reminder of the inflationary pressures bubbling almost everywhere in the economy at present.
Elsewhere, Exxon Mobil (NYSE:XOM) stock rose 0.8% after it flagged what may be the most profitable quarter in its history, the result of oil and gas prices that have skyrocketed as the world economy has reopened in the wake of the pandemic and as sanctions against Russia have forced western nations to chase non-Russian supplies on the open market.