Stocks fall, extending this week’s losses
Technology and financial companies helped pull U.S. stocks broadly lower Thursday, bringing the Standard & Poor’s 500 index to its fourth daily loss. The benchmark index is now on track for its first weekly drop since January.
Declines by healthcare firms and big retailers also weighed on the market. Utilities eked out a gain as investors sought out safer holdings.
With fourth-quarter earnings having wound down and uncertainty lingering over the U.S.-China trade talks, investors have had little reason to extend the gains the market has made since early this year.
The wave of selling on Wall Street followed a sell-off in European indexes after the European Central Bank delayed its next interest rate hike and announced a new round of cheap loans for banks. Traders saw the move as the central bank acknowledging weaker economic growth, and that stoked investors’ worries that the global economy is slowing.
“The tone for the day was pretty much set by the ECB,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Normally the market would respond well to this very accommodative monetary policy, but the comments around it and concerns for the eurozone economy are probably what’s put the market back on its heels.”
The S&P 500 fell 22.52 points, or 0.8%, to 2,748.93. The Dow Jones industrial average fell 200.23 points, or 0.8%, to 25,473.23.
The Nasdaq composite dropped 84.46 points, or 1.1%, to 7,421.46. The Russell 2000 index of smaller-company stocks declined 13.19 points, or 0.9%, to 1,523.63.
A lack of concrete news on trade and lingering economic concerns have been weighing on stocks all week.
Investor optimism about progress in the U.S.-China trade talks appears to be waning. Media reports have signaled that a deal could be struck this month, but there is less confidence that any of the major issues will be resolved.
Meanwhile, traders have been combing company earnings reports and economic data for clues about the trajectory of the global economy, which has been showing signs of slowing. Investors will get a better look at U.S. economic trends Friday, when the government releases key data on jobs and home construction.
On Thursday, the ECB became the latest central bank to acknowledge weaker economic growth and take steps to lessen the damage. The ECB said it would not raise rates before the end of this year at the earliest. Previously, it had said that earliest rate hike could come in the fall.
China’s government has also taken up a series of stimulus measures. In the United States, the Federal Reserve has pulled back from raising interest rates, acknowledging potential threats to economic growth.
“Investors are very, very concerned about a recession — overly concerned,” Davidson said. “The U.S. economy itself is not anywhere near contracting, but it’s not growing certainly at the rapid pace it has in prior years.”
Digital storage companies Seagate Technology and Western Digital both fell 2.3% on Thursday as part of the sharp decline in technology stocks.
Disappointing earnings reports from a couple of retailers also helped put investors in a selling mood.
Kroger tumbled 10% after the grocery store operator reported weak earnings and a drop in fourth-quarter revenue that fell short of Wall Street forecasts. The stock was the biggest decliner in the S&P 500.
Barnes & Noble slumped 12.6% after the bookseller slashed its full-year earnings forecast.
H&R Block climbed 2.7% after the tax software and preparation company said it remains on track to hit its financial forecast for the fiscal year. The company reported a delay in tax returns filed during its fiscal third quarter that hurt revenue. The company’s fourth quarter, the height of tax season, is typically its strongest.
U.S. crude rose 0.8% to $56.66 a barrel in New York. Brent crude, used to price international oils, rose 0.5% to $66.30 a barrel in London.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.64% from 2.69%.
The dollar declined to 111.52 yen from 111.81 yen. The euro weakened to $1.1186 from $1.1308.
Gold slipped 0.1% to $1,286.10 an ounce. Silver fell 0.3% to $15.04 an ounce. Copper fell 0.3% to $2.91 a pound.
Wholesale gasoline rose 0.9% to $1.81 a gallon. Heating oil slipped 0.2% to $2.01 a gallon. Natural gas rose 0.9% to $2.87 per 1,000 cubic feet.
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