U.S. Stock Indexes Drop as Economic, Earnings Worries Rise

NEW YORK (AP) -

Renewed pessimism about the strength of the global economy and corporate profits this year led to sharp losses on Wall Street Thursday.

Technology companies, health care stocks and banks accounted for much of the selling. Twitter slumped almost 10 percent after issuing a weak forecast. Traders sought safety in U.S. government bonds, sending yields lower.

The broad sell-off followed a slide in overseas markets after European officials slashed their forecast for economic growth this year in the 19 countries that use the euro and the Bank of England warned that the British economy is set for its weakest growth in a decade.

The moves are the latest flashpoints of worry as investors gird for predicted slowdowns in economies around the world, and weaker corporate earnings growth.

The S&P 500 fell 25.56 points, or 0.9 percent, to 2,706.05. The Dow Jones Industrial Average lost 220.77 points, or 0.9 percent, to 25,169.53. The Dow was briefly down 389 points.

The Nasdaq composite slid 86.93 points, or 1.2 percent, to 7,288.35. The Russell 2000 index of smaller companies gave up 12.40 points, or 0.8 percent, to 1,505.63.

U.S. indexes took their cue early Thursday from major European markets, which tumbled after the European Union’s commission slashed its 2019 forecast for economic growth in the 19 countries that use the euro to 1.3 percent from an earlier forecast of 1.9 percent.

In London, the Bank of England cut its forecast for growth this year to 1.2 percent from an earlier forecast of 1.7 percent. That would be its slowest growth since 2009.

In the U.S., a report showed that the job market remains strong as fewer Americans applied for unemployment benefits last week, a sign that layoffs are low. But many economists expect the U.S. economy to slow this year as well, along with economies around the rest of the world.

Twitter’s latest quarterly results fed traders’ concerns about slowing corporate profits.

The company gave a better-than-expected earnings report for its latest quarter, but its stock price tumbled 9.8 percent after it said revenue for this quarter may fall short of some analysts’ estimates. Other social media companies also fell. Dunkin’ Brands fell 3 percent after the doughnuts chain gave 2019 guidance that fell short of what analysts were expecting.

Shares in Tapestry tumbled 14.8 percent after the owner of Kate Spade, Coach and other luxury apparel brands reported quarterly earnings and revenue that missed Wall Street’s estimates.

The resurgent jitters over the global economy sent investors toward Treasury bonds, which are seen as safer investments during tumultuous times. When a bond’s price rises, its yield falls, and the yield on the 10-year Treasury note fell to 2.66 percent from 2.69 percent late Wednesday.

The drop in the 10-year Treasury yield, which affects rates on mortgages and other consumer loans, weighed on bank shares. Wells Fargo fell 2.3 percent.

Benchmark U.S. crude oil dropped 2.5 percent to settle at $52.64 a barrel. Natural gas slid 4.2 percent. That helped drag energy stocks in the S&P 500 down by 2.1 percent, the worst decline among the 11 sectors that make up the index. Newfield Exploration led the sector slide, dropping 6.7 percent.