Major indexes drifted lower in early trading, following news that orders for long-lasting U.S. goods sank last month. The selling gathered strength in the afternoon, with companies like Avago Technologies and Skyworks Solutions losing the most.
The Standard & Poor’s 500 index lost 30.45 points, or 1.5 percent, to 2,061.05. The Dow Jones industrial average fell 292.60 points, or 1.6 percent, to 17,718.54, while the Nasdaq composite fell 118.21 points, or 2.4 percent, to 4,876.52.
It was the worst day for stocks since March 10, when speculation over the Federal Reserve’s plans to raise interest rates helped knock the S&P 500 down 1.7 percent.
Jack Ablin, chief investment officer at BMO Private Bank, said he thinks it’s going to be tough for the market to sustain a strong run higher. Major indexes still trade near record highs reached at the start of the month, even though analysts expect earnings to shrink in the first half of the year. That makes the typical stock look pricey.
Before the market opened on Wednesday, the Commerce Department reported that orders to U.S. factories for long-lasting manufactured goods fell in February for the third time in four months. Demand for commercial aircraft, cars and machinery waned.
“You can put this durables report into your Surprise Index as it missed market expectations,” said Christopher Rupkey, chief financial economist at MUFG Union Bank, in a note to clients. “But more importantly it is another piece of data that shows the real GDP economy is running 2 percent and not 3 percent.”
Among companies making big moves, H.J. Heinz and Kraft Foods announced plans to merge in a deal that would create one of the world’s largest food companies. The merger was engineered by Heinz’s owners, Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital, and still needs a nod from federal regulators and Kraft shareholders. Kraft’s stock shot up $21.85, or 36 percent, to $83.17.
Apollo Education Group turned in a quarterly loss as enrollment fell at its for-profit University of Phoenix. The company’s stock plunged $7.95, or 28 percent, to $20.04.
Major indexes closed with losses across Europe. Germany’s DAX dropped 1.2 percent and France’s CAC 40 lost 1.3 percent. Britain’s FTSE 100 sank 0.4 percent.
U.S. government bond prices fell, pushing the yield on the 10-year Treasury note up to 1.93 percent.
In the commodity markets, gold rose $5.60 to settle at $1,197 an ounce and silver inched up 2 cents to $17 an ounce. Copper slipped a penny to $2.79 a pound.
The price of U.S. crude rose amid concerns of spreading turmoil in the Middle East after Saudi Arabia reportedly began amassing troops near its border with strife-torn Yemen. Benchmark U.S. crude rose $1.70 to close at $49.21 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.37 a barrel to close at $56.48 a barrel in London.
In other trading on the New York Mercantile Exchange:
- Wholesale gasoline rose 3.7 cents to close at $1.837 a gallon.
- Heating oil rose 2.1 cents to close at $1.728 a gallon.
- Natural gas fell 6.3 cents to close at $2.723 per 1,000 cubic feet.