U.S. Stocks Recover Losses After Early Sell-Off

Traders on the floor of the New York Stock Exchange, Thursday. (Drew Angerer/Getty Images)

U.S. stocks recovered their losses in volatile midday trading Thursday following an early sell-off because of yet another disappointing report on the economy.

The Dow Jones Industrial Average pulled back to a slight loss after dropping as much as 335 points in the early going. Both the S&P 500 and Nasdaq were slightly higher following the early rout.

Investors were jolted by surprisingly slow growth in the U.S. services sector last month, the weakest in three years. That followed troubling news on business hiring and manufacturing earlier this week that knocked the market lower.

The grim start to October, which brought the S&P 500 down 2.8% for the month so far, more than erased all of the index’s gain from September.

The uncertainty about the economy mostly stems from the U.S.-China trade dispute. Investors now have to factor in a potential trade war between the U.S. and Europe after the U.S. imposed tariffs on European goods Wednesday after getting permission to do so from the World Trade Organization.

KEEPING SCORE: The S&P 500 index rose 0.2% as of 12:27 p.m. Eastern time. The Dow was little changed at 26,079. The Nasdaq rose 0.5%. Small-company stocks lagged the rest of the market. The Russell 2000 lost 0.4%.

SECTORS: Technology stocks notched gains, led by software maker Microsoft and chipmaker Nvidia. PepsiCo led consumer product makers higher following a solid earnings report.

Bank stocks suffered losses as bond yields slumped. The yield on the 10-year Treasury fell to 1.54% from 1.59% late Wednesday.

Real estate hung on to gains from earlier. That’s a safe-play, high-dividend sector that investors tend to favor when they’re feeling nervous.

OVERSEAS: Stocks in Europe and Asia moved lower. Britain and the European Union remain divided on a potential deal covering their separation. Britain faces a chaotic exit from the trading bloc on Oct. 31 if it leaves without a deal covering trade and other issues. London’s FTSE 100 slumped 1.4%.

BUBBLY FORECAST: PepsiCo rose 3.8% after the company told investors it expects to meet or beat its target for revenue growth in 2019. The company set a goal of 4% growth in revenue from existing businesses. The solid forecast followed surprisingly good third quarter profit and revenue.

BUSTED GEAR: Tesla fell 6.5% after the electric car maker fell short of sales forecasts in the third quarter. The company delivered a record 97,000 vehicles, but still fell short of analysts’ forecasts for 99,000 vehicles. Tesla is also lagging behind the pace it needs to reach CEO Elon Musk’s sales goal for the entire year.

LONG EXPOSURE: GoPro plunged 20% after the camera maker cut its profit and revenue forecasts for the year because of production delays. It is shifting shipments of its latest camera, the HERO8 Black, to the fourth quarter.