FINANCIAL MARKETS
NEW YORK—U.S. stocks plunged Thursday as losses for Cisco Systems hurt technology companies while WalMart declined after its latest quarterly report. Banks also dropped as bond yields and interest rates sank for a second day.
It was the second-worst day for stocks this year, which has seen few large declines. Along with technology companies and retailers, transportation companies skidded and all of the industrial, financial and basic materials companies in the S&P 500 fell. Those sectors tend to struggle when investors are concerned about economic growth, although there weren’t any specific signs of economic trouble Thursday.
The Standard & Poor’s 500 index dropped 38.10 points, or 1.5 percent, to 2,430.01, its lowest close since July 11. The Dow Jones industrial average tumbled 274.14 points, or 1.2 percent, to 21,750.73. The Nasdaq composite sank 123.19 points, or 1.9 percent, to 6,221.91. The Russell 2000 index of smaller-company stocks fell 24.59 points, or 1.8 percent, to 1,358.94.
Bill Northey, chief investment officer at U.S. Bank Wealth Management, said that minutes released Wednesday from the Federal Reserve’s policy meeting last month marked “a little bit of a change in tone,” and suggested that the central bank is becoming more cautious about raising interest rates.
That helped push long-term interest rates in the bond market lower since then. Lower bond yields tend to hurt banks, because it prevents them from charging higher rates on loans, and benefits high-dividend stocks.
Investors were also assessing the state of President Donald Trump’s business-friendly agenda as he continues to face criticism over his comments after the violence in Charlottesville, Virginia, over the weekend. After he was elected, investors hoped his proposals for tax cuts and infrastructure spending would boost corporate profits.
Despite some shaky reports Thursday, it’s been another strong quarter of corporate earnings. Per-share profits for S&P 500 companies have grown almost 11 percent in the second quarter versus the same period a year ago. Profits for energy companies have quadrupled because the price of oil has stabilized, and technology companies have also posted big gains. Consumer-focused companies have made smaller gains.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.19 percent from 2.23 percent. The yield on the 2-year note fell to 1.29 percent from 1.33 percent.
Benchmark U.S. crude rose 31 cents to $47.09 a barrel in New York. Brent crude, used to price international oils, added 76 cents, or 1.5 percent, to $51.03 a barrel in London.
Wholesale gasoline added 2 cents to $1.59 per gallon. Heating oil picked up 1 cent to $1.58 a gallon. Natural gas gained 4 cents to $2.93 per 1,000 cubic feet.