Banks, tech stocks drag market to loss
Stocks closed modestly lower Wednesday on Wall Street, handing the market its second straight loss.
Banks and technology companies accounted for much of the slide as investors shifted money into U.S. bonds, precious metals and other holdings considered havens after more than a week of aggressive buying.
Energy stocks took the heaviest losses following a 4 percent drop in the price of U.S. crude oil. That helped outweigh gains in health care, utilities and elsewhere in the market.
The latest decline followed a broad drop in stocks that ended a five-day winning streak for the market. The Federal Reserve set off last week’s rally when it signaled that it is willing to cut interest rates to help stabilize the economy if the U.S. trade war with China starts to crimp growth.
Investors are worried that the dispute will drag on much longer than previously expected, weighing on economic growth and corporate profits. That has traders looking ahead to next week’s Fed meeting.
“There are concerns about whether or not the Fed next week at its meeting is going to in fact continue to move its stance toward lowering rates,” said Quincy Krosby, chief market strategist at Prudential Financial. “The increasing concern is that the global economy continues to slow and that the slowdown is affecting the United States as well.”
The S&P 500 index lost 5.88 points, or 0.2 percent, to 2,879.84.
The Dow Jones Industrial Average fell 43.68 points, or 0.2 percent, to 26,004.83. The technology heavy Nasdaq composite index dropped 29.85 points, or 0.4 percent, to 7,792.72.
The sell-off in U.S. markets reflects heightened investor uncertainty over trade.
President Donald Trump’s decision to threaten an expansion of the trade war to Mexico made a jittery market even more uneasy. Those potential tariffs have been indefinitely postponed, but the move left its mark.
Investors will likely have to deal with more volatility ahead of an economic summit later this month. Trump has said he plans to meet with Chinese President Xi Jinping at the Group of 20 summit in Osaka, Japan. But Trump has also said that if the two can’t reach an agreement on trade, he’ll proceed with tariffs on $300 billion goods from China that aren’t already subject to import taxes.
Technology companies accounted for much of the market’s slide Wednesday. The sector has been under the most pressure from swings in sentiment over the trade dispute between the U.S. and China. Cisco Systems fell 2.2 percent, and Micron Technology dropped 5.4 percent.
Banks declined as bond prices rose, nudging yields lower. The yield on the 10-year Treasury note fell to 2.12 percent
In other trading, energy futures finished lower. Benchmark U.S. crude slid 4 percent to settle at $51.14 a barrel. Brent crude oil, the international standard, dropped 3.7 percent to close at $59.97 a barrel. Wholesale gasoline fell 4 percent to $1.69 per gallon. Heating oil slid 2.3 percent to $1.78 per gallon. Natural gas dipped 0.5 percent to $2.39 per 1,000 cubic feet.