Bank stocks were shaken Thursday after a steep drop in China's exports made investors worry again about the health of the world's second-largest economy. U.S. stocks gradually recovered most of their losses as safer investments such as utilities traded higher.
Indexes took big losses early on, after major Asian markets skidded overnight. The Dow Jones industrial average dropped as much as 184 points. Industries that depend heavily on China and global economic growth, such as technology and energy companies, also fell. As the day wore on, though, investors bought utilities, real estate investment trusts and other stocks that tend to pay big dividends.
And they seemed to reconsider how well China's economy is doing. Over the last few months it appeared to be getting stronger, said David Chalupnik, head of equities for Nuveen Asset Management.
"We've had three months of good data out of China," he said. "The question is, is it just one number or is this the start of a new trend?"
The Dow closed down 45.26 points, or 0.2%, at 18,098.94. The Standard & Poor's 500 index fell 6.63 points, or 0.3%, to 2,132.55. The Nasdaq composite sank 25.69 points, or 0.5%, 5,213.33.
China's exports fell 10% in September compared with a year earlier. That was worse than analysts expected, and it was a much bigger drop than in August. China has been crucial to global economic growth for a quarter of a century, and since summer 2015, stocks periodically have been roiled by worries that China's economy was weakening.
Financial firms took the largest losses as investors feared the latest reports on China meant banks won't lend as much money to consumers and businesses around the world. Bank of America fell 1.2% to $15.83, and Bank of New York Mellon skidded 2.6% to $39.09.
"They need U.S. growth and they need global growth to really grow earnings," said Chalupnik said.
Wells Fargo fell 1.3% to $44.75 after it said Chairman and CEO John Stumpf retired as it deals with a scandal over its sales practices. The stock is down 11% since early September.
Stocks that pay big dividends did better than the rest of the market, and utility companies and real estate investment trusts traded higher. Dominion Resources advanced 1.6% to $73.31, and Duke Energy climbed 1.7% to $77.94.
Investors also bought government bonds, which sent yields sharply lower. The yield on the 10-year Treasury note slid to 1.74% from 1.77%.
Energy companies declined even though energy prices moved higher. Chevron slid 1.3% to $100.79; Cabot Oil & Gas dropped 4.7% to $22.75.
Companies that rely heavily on sales to China fell. Chip-making equipment company Applied Materials shed 2.7%, to $27.86; security software maker Symantec fell 2.6% to $24.28. Copper and gold producer Freeport-McMoRan dropped 4.1% to $9.64.
France's CAC 40 retreated 1.1%, and Germany's DAX fell 1%. The FTSE 100 in Britain was down 0.7%. In Japan the Nikkei 225 lost 0.4%, South Korea's Kospi fell 0.9% and Hong Kong's Hang Seng index fell 1.6%. Thailand's benchmark index sank 2.4% after the death of King Bhumibol Adulyadej. The king had reigned for 70 years.
Airlines moved higher after Delta suggested airfares have reached a low point. The company reported a strong profit thanks in part to cheap jet fuel, and it plans to cut capacity to deal with lower fares and rising salaries. Delta rose 1.9% to $40.01, and American Airlines climbed 5% to $39.24.
Ulta Salon jumped 11.4% to $266.14 after the beauty products retailer gave strong estimates for the third quarter.
Railroad operator CSX climbed 3.1% to $31.15 after its earnings were better than expected even though coal volumes keep falling.
Oil prices recovered from an early loss. Benchmark U.S. crude rose 26 cents to $50.44 a barrel. Brent crude, the international standard, rose 22 cents to $52.03 a barrel.
Natural gas jumped 13 cents, or 4.1%, to $3.34 per 1,000 cubic feet. Wholesale gasoline rose 2 cents to $1.48 a gallon. Heating oil rose 1 cent to $1.58 a gallon.
The Energy Department said a colder winter will probably mean slightly higher household energy bills for natural gas, electricity, heating oil and propane.
The dollar fell to 103.60 yen from 104.25 yen. The euro rose to $1.1053 from $1.1011.
Gold rose $3.80 to $1,257.60 an ounce. Silver fell 5 cents to $17.46 an ounce. Copper fell 5 cents, or 2.5%, to $2.12 a pound.
2:25 p.m.: This article has been updated with closing prices, analysis and additional information.
1:25 p.m.: This article has been updated with the close of markets.