After 19 years covering the stock market for USA TODAY, Adam Shell gives his best advice on how to successfully invest in the market.
NEW YORK – Technology and financial companies helped pull U.S. stocks broadly lower Thursday, marking the fourth straight loss for the Standard & Poor’s 500. The benchmark index is now on track for its first weekly drop since January.
Losses in health care stocks and big retailers also weighed on the market. Utilities eked out a gain as investors sought out safer holdings.
With fourth-quarter earnings having wound down and lingering uncertainty over trade talks between the U.S. and China, traders have had little reason to extend the gains the market has made since early this year.
The wave of selling on Wall Street followed a sell-off in European indexes after the European Central Bank delayed its next interest rate hike and announced a new round of cheap loans for banks. Traders saw the move as an acknowledgement of weaker economic growth by the central bank, stoking investors’ worries that the global economy is slowing.
“The tone for the day was pretty much set by the ECB,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Normally the market would respond well to this very accommodative monetary policy, but the comments around it and concerns for the eurozone economy are probably what’s put the market back on its heels.”
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The S&P 500 declined 22.52 points, or 0.8 percent, to 2,748.93. The Dow Jones Industrial Average fell 200.23 points, or 0.8 percent, to 25,473.23. The average was briefly down more than 320 points. The Nasdaq composite dropped 84.46 points, or 1.1 percent, to 7,421.46.
European indexes finished lower.
A lack of concrete news on trade and lingering economic concerns have been weighing on stocks all week.
Investor optimism about progress in trade talks between the U.S. and China appears to be waning. Media reports have signaled that a deal could be struck this month, but there is less confidence in any of the major issues being resolved.
Meanwhile, traders have been combing company earnings reports and economic data for clues about the trajectory of the global economy, which has been showing signs of slowing. Investors will get a better look at U.S. economic trends Friday, when the government releases key data on jobs and new home construction.
The ECB on Thursday became the latest central bank to acknowledge weaker economic growth and take steps to lessen the damage. The ECB said it will not raise rates before the end of this year at the earliest. Previously, it had said that earliest rate hike would come in the fall.
China’s government has also taken up a series of stimulus measures. In the U.S., the Federal Reserve has pulled back from raising interest rates, acknowledging potential threats to economic growth.
“Investors are very, very concerned about a recession – overly concerned,” Davidson said. “The U.S. economy itself is not anywhere near contracting, but it’s not growing certainly at the rapid pace it has in prior years.”
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Digital storage companies Seagate Technology and Western Digital fell Thursday as part of the sharp decline in technology stocks. Shares in both companies dropped 2.3 percent.
Disappointing earnings reports from a couple of retailers also helped put investors in a selling mood.
Kroger tumbled 10 percent after the grocery store operator reported weak earnings and a drop in fourth-quarter revenue that fell short of Wall Street forecasts. The stock was the biggest decliner in the S&P 500.
Traders bid up shares in H&R Block after the tax software and preparation company said it remains on track to hit its financial forecast for the fiscal year.
The company reported a delay in tax returns filed during its fiscal third quarter that hurt revenue. The company’s fourth fiscal quarter, the height of tax season, is typically its strongest. H&R Block’s shares finished 2.7 percent higher.
U.S. crude rose 0.8 percent to settle at $56.66 a barrel in New York. Brent crude, used to price international oils, gained 0.5 percent to close at $66.30 a barrel in London.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.64 percent from 2.69 percent late Wednesday.
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