Stock market investors sell as tensions grow between the U.S. and North Korea.
Brewing tensions between the U.S. and North Korea put investors in a selling mood again Thursday, dragging U.S. stocks lower for the third day in a row.
The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in nearly three months.
Technology companies, which have been the biggest gainers this year as the market hit a succession of record highs, led the broad slide. Banks and department store shares also were among the big decliners. Utilities eked out a small gain.
“The market has been looking for an excuse to sell off, and North Korea and the president gave the market that excuse,” said David Schiegoleit, managing director at the U.S. Bank Private Client Wealth Management. “As long as it doesn’t go beyond just a war of words, this is going to be short-lived.”
The Standard & Poor’s 500 index dropped 35.81 points to 2,438.21. The Dow Jones industrial average slid 204.69 points to 21,844.01, just shy of its low point for the day.
The tech-heavy Nasdaq composite bore the brunt of the sell-off, losing 135.46 points to 6,216.87. May 17 was the last time the three indexes had a bigger single-day decline.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.20 percent from 2.25 percent late Wednesday.
Unease over the North Korean situation pushed the VIX, a measure of how much volatility investors expect in stocks, up 44.4 percent. That’s the biggest increase since May.
The market jitters gave investors an opportunity to pocket some of their recent gains after a string of record highs fueled by strong corporate earnings.
“There’s not a fundamental reason why what we’re seeing out of North Korea right now should affect stock market prices, but it’s being used as the reason to sell off right now because we’ve been looking for it for so long,” Schiegoleit said. “This really is a profit-taking sell-off. I don’t see it as a fear-driven sell-off.”
Heading into Thursday, some 89 percent of the companies in the S&P 500 had reported quarterly results.
Of those, 52 percent delivered earnings and revenue that beat financial analysts’ forecasts, according to S&P Global Market Intelligence.