U.S. stocks were sharply lower in afternoon trading Wednesday, extending a losing streak for the benchmark S&P 500 index to a sixth day. Technology stocks, banks and media and communications companies accounted for most of the selling. Disappointing quarterly results and outlooks weighed on the market, stoking investors’ jitters over future growth in corporate profits. Bond prices continued to rise, sending yields lower.
KEEPING SCORE: The S&P 500 fell 39 points, or 1.4 percent, to 2,701 as of 1:52 p.m. Eastern Time. The Dow Jones Industrial Average lost 197 points, or 0.8 percent, to 24,994. The tech-heavy Nasdaq slid 171 points, or 2.3 percent, to 7,266. The Russell 2000 index of smaller-company stocks gave up 29 points, or 1.9 percent, to 1,497.
THE QUOTE: “You’ve seen more discouraging (company) commentary this quarter than you have the last two,” said Tom Martin, senior portfolio manager with Globalt Investments. “You’re really starting to get more of a groundswell of caution. There’s some concern about the fourth quarter and what that’s going to look like.”
EARNINGS SPREE: Investors were weighing the latest batch of company results in the busiest week of the quarterly earnings calendar. While S&P 500 companies are expected to deliver 21.9 percent earnings growth for the third quarter, according to S&P Global Market Intelligence, investors are concerned about future growth amid rising inflation, interest rates and uncertainty over trade. Some companies, including Caterpillar and 3M, have reported disappointing results and warned of rising costs related to tariffs related to the U.S.–China trade dispute. Among the big companies slated to release quarterly results this week are Microsoft, Amazon and Colgate-Palmolive.
TECH AND MEDIA SLUMP: Technology consulting company DXC Technology led the tech-sector slide, plunging 17.2 percent to $72.49. AT&T was among the big decliners in the media and communications sector, losing 6 percent to $31.06 after the communication giant’s latest quarterly results fell short of Wall Street’s expectations.
TARIFFS TROUBLE: Shares in iRobot gave up 10.7 percent to $82 percent after the robotics technology company said tariffs will reduce its profitability in the fourth quarter.
DOES NOT COMPUTE: Texas Instruments fell 4 percent to $96.20 after the chipmaker delivered quarterly results that fell short of Wall Street’s forecasts, noting that demand across most markets is slowing.
BOTCHED DELIVERY: United Parcel Service slid 3.1 percent to $110.74 after the shipping company reported weak international revenue, while the strong dollar and high fuel prices also hurt its results.
HOUSING SKID: The Commerce Department said sales of new U.S. homes plunged 5.5 percent in September, the fourth monthly drop. The report is the latest sign that the housing market is cooling amid rising mortgage rates. Several homebuilders declined following the release of the report. Beazer Homes USA slumped 5 percent to $8.75.
HIGH FLYER: Boeing rose 3.7 percent to $362.85 after the defense contractor’s latest quarterly results topped analysts’ forecasts. The company also raised its estimates for the year, citing faster orders for aircraft.
BOND YIELDS: Bond prices rose, sending the yield on the 10-year Treasury note down to 3.13 percent from 3.16 percent late Tuesday.
ENERGY: Crude oil prices were headed higher Wednesday, clawing back part of a sharp decline a day earlier. Benchmark U.S. crude added 1.5 percent to $67.41 per barrel in New York. Brent crude, used to price international oils, gained 0.9 percent to $77.16 per barrel in London.
Energy stocks declined despite the pickup in oil prices. Valero Energy slid 4.2 percent to $87.84.
CURRENCIES: The dollar strengthened to 112.51 yen from 112.47 yen on Tuesday. The euro fell to $1.1393 from $1.1467.
MARKETS OVERSEAS: Major indexes in Europe finished mixed. Germany’s DAX fell 0.7 percent, while the CAC 40 in France lost 0.3 percent. Britain’s FTSE 100 inched up 0.1 percent. Japan’s Nikkei 225 index rose 0.4 percent after a private survey pointed to a recovery in manufacturing in October. Hong Kong’s Hang Seng index dropped 0.4 percent and the Kospi in South Korea gave up 0.4 percent.