Stock market dips on Kabul bombing news
Technology and communication companies led a broad selloff Thursday on Wall Street following deadly suicide attacks at the Kabul airport in Afghanistan.
The S&P 500 fell 0.6 percent a day after capping a five-day winning streak with an all-time high. The Dow Jones Industrial Average fell 0.5 percent, while the Nasdaq composite lost 0.6 percent. Despite the losses, the three major indexes are on track for weekly gains.
Twin suicide bombings struck Thursday outside Kabul’s airport, where large crowds of people trying to flee Afghanistan have massed. The airport had been the focus of NATO evacuations after the Taliban took over last week.
The declines were widespread, with 10 of the 11 sectors in the S&P 500 closing lower. Technology stocks, communication services providers and a mix of companies that rely on consumer spending accounted for much of the pullback. Banks and energy stocks also weighed on the index. Only real estate stocks closed higher.
Stocks had been moving lower in early trading before the bombings, following pullbacks in markets in Asia and Europe, as investors looked ahead to the Federal Reserve’s two-day conference in Jackson Hole, Wyo., which began Thursday. The selling accelerated swiftly once news of the attacks broke.
“The unfortunate news that we had around the airport bombing perhaps gave people a reason to sell more aggressively,“said J.J. Kinahan, chief strategist with TD Ameritrade.
The S&P 500 fell 26.19 points to 4,470, while the Dow dropped 192.38 points to 35,213.12. The
Nasdaq lost 96.05 points to 14,945.81.
Small company stocks shouldered some of the heaviest selling. The Russell 2000 index slid 25.29 points, or 1.1 percent, to 2,213.98.
Despite the sell-off in stocks, market indicators that traditionally signal worry on Wall Street were little changed. Treasury yields were mixed, and the yield on the closely watched 10-year Treasury held steady at 1.35 percent. Meanwhile, the price of gold rose only 0.2 percent.
The VIX, a measure of nervousness among stock investors, rose 12 percent, but remained slightly below 20, which signals market risk is low.
“That would imply those markets are not expecting a big fallout,” said Sam Stovall, chief investment strategist at CFRA.
Before the attack, most of the market’s attention was on the Fed and on what Fed Chair Jerome Powell will say today when he speaks at the central bank’s annual symposium.
Traders are betting that Fed officials will remain in a “wait and see” mode regarding inflation, since most policymakers believe any inflation earlier this year would be temporary and the rise in COVID-19 cases has worried some economists.