Energy stocks led a broad slide Thursday on Wall Street as oil and gas prices fell, handing the market its second straight daily loss.
Losses in technology and communications stocks also helped power the sell-off, offsetting gains in the healthcare and real estate sectors. Banks also rose, getting a boost from rising bond yields, which enable lenders to charge higher interest on loans.
The market’s downward tilt came as investors continued to weigh remarks issued Wednesday by the head of the Federal Reserve that appeared to dim prospects for an interest rate cut this year.
“You got a continuation of what you saw yesterday,” said Willie Delwiche, investment strategist at Baird. “You saw stock market weakness, you saw bond yields rising, and you saw the Fed funds futures continuing to shift away from pricing in a rate cut in the near future.”
The Standard & Poor’s 500 index fell 6.21 points, or 0.2%, to 2,917.52. The Dow Jones industrial average slid 122.35 points, or 0.5%, to 26,307.79. The Nasdaq composite, which is heavily weighted with technology companies, fell 12.87 points, or 0.2%, to 8,036.77.
Smaller-company stocks fared better. The Russell 2000 index rose 6.27 points, or 0.4%, to 1,582.65.
The S&P 500 index is up 16.4% for the year and notched three straight all-time highs before falling Wednesday after the remarks by Federal Reserve Chairman Jerome Powell.
In those remarks, Powell played down the possibility of an interest rate cut this year and restated the central bank’s message that there will probably be no rate hikes in 2019.
Those comments made it seem investors had a “less supportive Fed” than they anticipated, said Brad McMillan, chief investment officer for Commonwealth Financial Network.
McMillan noted that stocks’ decline was probably because they had gained so much in the last few weeks.
“We ran up to new highs again, and I think the markets are getting a little bit nervous about that,” he said.
The U.S. stock market has been riding high this year, making its way back from a late-2018 nosedive. The Fed spurred the market’s recovery this year when it signaled that it would take a patient approach to raising interest rates.
On Thursday, a slide in crude oil prices helped drag down energy stocks. The sector fell 1.7%, more than triple the declines in the technology and communications sectors.
Benchmark U.S. crude dropped 2.8% to settle at $61.81 a barrel. Brent crude, the international standard, slid 2% to $70.75 a barrel.
Marathon Oil shares declined 6.1% after the company reported revenue that fell short of estimates.
Technology stocks, the biggest gainers this year, also weighed on the market Thursday. Cognizant Technology Solutions led the sector’s decliners, losing 7.7%. Microsoft fell 1.3%.
Among media companies, Fox and Discovery each fell about 5%.
Investors were treated to a mixed batch of corporate earnings reports Thursday.
Fluor was the biggest loser in the S&P 500. The stock plunged 24.1% after the engineering and construction company reported a huge quarterly loss and issued an earnings forecast that fell far short of what analysts expected.
Sports apparel company Under Armour rose 3.5% after it reported first-quarter results that beat Wall Street forecasts and raised its profit forecast for the year.
Online games maker Zynga climbed 5.6% after raising its revenue forecast for the year.
Activision Blizzard, which rose 2% during regular trading, slid as much as 5.8% in after-hours trading after giving a second-quarter earnings forecast that fell well short of analysts’ estimates. The video game company provided the downbeat guidance the same day it announced the first five franchises of a new city-based “Call of Duty” league, part of a wager that competitive gaming will help fuel its next wave of growth.
Earnings reporting season is more than a third of the way through, and the results have been better than investors expected. Analysts had predicted a slump in profits, but their worst fears have not been realized.
Tesla shares rose 4.3% as the market seemed to approve of its decision to try to raise more than $2 billion in a stock and debt offering. The electric car maker reported a shrinking balance sheet and falling sales during the first quarter, and CEO Elon Musk had suggested it might need to raise more money.
Traders also proved hungry for Beyond Meat, which soared in its stock market debut. Shares in the maker of plant-based burgers and sausages zoomed more than 160% above their opening price of $25 each. The company is the latest in a string of high-profile IPOs this year, including Slack, Lyft and Zoom.
Bond prices fell. The yield on the 10-year Treasury note, which influences mortgages and some other loans, rose to 2.54% from 2.51%.
Wholesale gasoline fell 2.2% to $2.02 a gallon. Heating oil fell 0.8% to $2.08 a gallon. Natural gas dropped 1.2% to $2.59 per 1,000 cubic feet.
Gold fell 1% to $1,272 an ounce. Silver lost 0.8% to $14.62 an ounce. Copper fell 0.8% to $2.78 per pound.
The dollar weakened to 111.50 yen from 111.61 yen. The euro fell to $1.1175 from $1.1194.
Bloomberg was used in compiling this report.