Stocks on Wall Street ended modestly lower Thursday and bond prices rose as investors turned cautious, shifting money into lower-risk holdings.
The selling, which lost some of its momentum toward the end of the day, came as traders weighed the implications of the impeachment inquiry into President Trump and new government data showing slower U.S. economic growth.
Communication services, healthcare and energy stocks accounted for a big slice of the sell-off, which erased some of the market’s gains from the day before.
Consumer product makers, real estate companies and utilities, which are viewed as more defensive sectors, notched gains. Bond prices rose, pulling down the yield on the 10-year Treasury to 1.69% from 1.73%.
The congressional inquiry into Trump is throwing more volatility into an already sensitive market, particularly on trade issues. Traders also found no comfort in the Commerce Department’s latest economic snapshot, which said the U.S. economy grew at a 2% pace in the second quarter — a sharply lower pace than the 3%-plus growth rates seen over the last year.
“We’re giving back, clearly, some of yesterday’s gains,” said Jeramey Lynch, global investment specialist at J.P. Morgan Private Bank. “It’s just the uncertainty.”
The Standard & Poor’s 500 index slipped 7.25 points, or 0.2%, to 2,977.62. The Dow Jones industrial average fell 79.59 points, or 0.3%, to 26,891.12. The Nasdaq fell 46.72 points, or 0.6%, to 8,030.66.
Smaller-company stocks bore the brunt of the selling, sending the Russell 2000 down 17.33 points, or 1.1%, to 1,533.33.
The S&P 500 and Nasdaq are each on track for their second straight weekly loss as volatile trading brought on by anxiety over trade issues takes its toll. The late-September slide has been cutting into both indexes’ quarterly gains, all but erasing the Nasdaq’s.
Stocks got off to a mostly lower start Thursday ahead of a televised congressional hearing in the impeachment inquiry into Trump. Although many analysts say the congressional investigation isn’t likely to affect the market significantly, it does add a degree of uncertainty and could complicate the White House’s efforts to resolve trade disputes with China and other nations.
Chinese importers have set deals to buy U.S. soybeans and pork as the governments make conciliatory gestures ahead of trade talks, and Trump has suggested a trade deal could happen soon. Still, investors remain cautious. The next round of U.S.-China trade talks is expected next month.
Separately, Japan and the United States signed a deal covering agricultural, industrial and digital trade, but it kept auto tariffs unchanged.
Communication services stocks fell broadly. Facebook slid 1.5% amid concerns that the social network giant could find itself the target of another antitrust investigation.
Health insurers were among the biggest losers. UnitedHealth Group declined 3%. Cigna slid 3.5%.
Energy stocks also fell. Chevron lost 2.7%.
Technology stocks rebounded after an early slide. The sector has been volatile all week as investor worry about the U.S.-China trade war. Adobe rose 2.3%.
High-dividend, lower-risk sectors fared better as investors sought safety. Procter & Gamble rose 1%. Kimco Realty added 2.4%. Edison International gained 1.6%.
Outside of trade and politics, investors are getting ready for the close of the third quarter and more corporate earnings reports.
“What I’m looking forward to is earnings,” Lynch said. “Earnings are going to give us a look at how the third quarter was, particularly with the consumer.”
Thursday brought a mixed batch of companies’ quarterly report cards.
Carnival shares sank 8.6%, the biggest loser in the S&P 500, after the cruise line operator cut its 2019 profit forecast because of a jump in fuel costs. Crude oil prices have risen more than 23% this year. Other cruise operators also declined. Norwegian Cruise Line slid 3.8%. Royal Caribbean Cruises skidded 2.5%.
Conagra Brands climbed 3.7% after the food maker reported a surprisingly good first-quarter profit. It cited a solid sales increase in frozen foods and a benefit from last year’s purchase of Pinnacle Foods.
Beyond Meat jumped 11.6% as McDonald’s started selling the company’s plant-based burger in Ontario, Canada. The move pits Beyond Meat and McDonald’s against Burger King, which is selling a plant-based Impossible Foods burger.
Investors gave a cool reception to Peloton’s stock market debut. The connected-exercise firm’s shares closed 11.2% below their IPO price of $29.
Benchmark crude oil fell 8 cents to settle at $56.41 a barrel. Brent crude oil, the international standard, rose 35 cents to close at $62.74 a barrel. Wholesale gasoline rose 3 cents to $1.66 a gallon. Heating oil rose 1 cent to $1.96 a gallon. Natural gas fell 9 cents to $2.41 per 1,000 cubic feet.
Gold rose $2.90 to $1,507.50 an ounce. Silver fell 16 cents to $17.80 an ounce. Copper fell 4 cents to $2.56 a pound.