Stocks Sink on Weak Industrial Earnings10/18 15:45
U.S. stocks slumped again Thursday as investors continued to sell shares of
technology and internet companies, industrials, and companies that rely on
NEW YORK (AP) -- 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
At the start of trading, stocks took small losses as bond prices fell and
interest rates spiked. While the gain in interest rates didn't last, stocks
turned lower late in the morning, and by the end of the day they had wiped away
most of their big rally on Tuesday.
The S&P 500 fell 40 points, or 1.4 percent, to 2,768. The Dow Jones
Industrial Average lost 327 points, or 1.3 percent, to 25,379. It was down as
much as 470 earlier.
The Nasdaq gave up 157 points, or 2.1 percent, to 7,485. The Russell 2000 of
smaller-company stocks fell 28 points, or 1.8 percent, to 1,560.
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.
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.
"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.
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.
European leaders expressed concern about the Italian government's plans to
increase spending and widen its budget deficit. European Union budget chief
Pierre Moscovici told Italy's economic minister that the government's plans
make it unlikely that Italy will be able to reduce its public debt to levels
agreed upon by EU countries.
Italy's FTSE MIB dropped 1.9 percent and Italian government bond prices
dropped again, sending yields to their highest levels since February of 2014.
Germany's DAX dipped 1.1 percent. The French CAC 40 lost 0.5 percent and the
FTSE 100 in Britain slipped 0.4 percent.
Japan's Nikkei 225 index sank 0.8 percent and the Kospi in South Korea lost
0.9 percent. Hong Kong's Hang Seng index was little changed, and remained near
its lowest level since May 2017.