Stocks suffer worst day since May Worries about N. Korea lead to slide in tech, banks, retail
Brewing tension 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 shortlived.”
The Standard & Poor’s 500 index dropped 35.81 points, or 1.5 percent, to 2,438.21. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, 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, or 2.1 percent, to 6,216.87. May 17 was the last time the three indexes had a bigger single-day decline.
Smaller-company stocks also fell sharply. The Russell 2000 index gave up 24.40 points, or 1.8 percent, to 1,372.54. All of the indexes are down for the week.
“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.
Heading into Thursday, 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.
Oil prices closed lower after an early rally faded. Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, slid 80 cents, or 1.5 percent, to $51.90.