Tech, industrial stocks continue to slump
NEW YORK — U.S. stocks slumped again Thursday as investors continued to sell shares of technology and internet companies, industrials, and companies that rely on consumer spending.
Several industrial companies tumbled after releasing weak quarterly reports, and European stocks also fell as European Union leaders criticized Italy’s spending plans.
Stocks have skidded over the last two weeks, and there are signs investors are worried about future economic growth. The S&P 500 has fallen 5.5 percent in volatile trading since Oct. 3, and technology, industrial and energy companies have taken some of the biggest losses. Those companies tend to do better when the economy is growing more quickly and consumers and businesses have more money to spend.
“If uncertainty starts to creep in around trade or growth, that could be a risk to the recovery in ... corporate spending,” said Jill Carey Hall, senior U.S. equity strategist for Bank of America Merrill Lynch. She said investors will monitor company reports over the next few weeks to learn about their business forecasts and plans.
The S&P 500 index shed 40.43 points, or 1.4 percent, to 2,768.78. The Dow Jones Industrial Average lost 327.23 points, or 1.3 percent, to 25,379.45. It was down as much as 470 earlier.
The Nasdaq composite sank 157.56 points, or 2.1 percent, to 7,485.14. The Russell 2000 index of smaller-company stocks declined 28.85 points, or 1.8 percent, to 1,560.75.
Among industrial companies, aircraft maker Textron slid 11.3 percent to $57.49 after its profit and sales fell far short of analyst forecasts. The company said its aerospace and defense business and its industrial business both weakened. Tool and diagnostic equipment company Snap-on lost 9.6 percent to $151.47 after it posted lower revenue than analysts expected.
Industrial and basic materials companies have taken bigger losses than any other part of the market over the last month, and one reason is that investors feel they are especially vulnerable in the ongoing trade dispute between the U.S. and China. They’re already dealing with tariffs on imported steel and aluminum, which have increased their costs and can also hurt sales, and if the global economy slows, then manufacturing and construction could slow down, too.
Amazon pulled retailers lower as it lost 3.3 percent to $1,770.72. Video game maker Activision Blizzard lost 8.3 percent to $71.81 after it announced early sales numbers from “Call of Duty: Black Ops 4,” and Apple fell 2.3 percent to $216.02.
Those are some of the sectors that have fared the worst recently. The stocks that have held up the best include utility and household products companies. They don’t depend as much on economic growth, as consumers are likely to use about the same amount of electricity and buy the same amount of toilet paper or cereal regardless of the state of the economy.