Global growth worries slam Wall St. as trade tensions persist
By April Joyner NEW YORK (Reuters) - U.S. stocks slumped on Thursday as investors dumped shares of technology companies as well as businesses in cyclical sectors on fears that the escalating trade war between United States and China would stymie global economic growth.
By April Joyner
NEW YORK (Reuters) - U.S. stocks slumped on Thursday as investors dumped shares of technology companies as well as businesses in cyclical sectors on fears that the escalating trade war between United States and China would stymie global economic growth.
Further fuelling trade fears among investors, Beijing said that Washington needs to correct its "wrong actions" for trade talks to continue after the United States blacklisted Huawei Technology Co Ltd last week.
Among the S&P 500's major sectors, only utilities and real estate, both considered defensive areas, registered gains as investors moved to safe-haven assets such as Treasuries.
Shares of S&P 500 technology and industrial companies, two sectors that have been bellwethers of trade sentiment, fell more than 2%. Shares of S&P 500 companies in the cyclical financial and energy sectors also tumbled, with the 3.8% drop in energy shares leading losses among S&P 500 sectors.
A 5% plunge in oil prices in response to a dampened outlook for demand impeded energy shares, while a drop in 10-year Treasury yields, which hit their lowest level since December 2019, held back financial shares.
"We're going to see a drift lower until there's a resolution of what's happening with China," said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. "If you're trading, it's not a bad idea to put yourself on the sidelines and sit it out."
Adding to the downbeat mood in markets, data from IHS Markit showed U.S. manufacturing faltered in May, with new orders falling for the first time since August 2009.
"Investors realize that coming to a deal is going to be more challenging and that is really harmful to the economic environment," said Luke Tilley, chief economist at Wilmington Trust in Wilmington, Delaware, who described the day's trading as "a classic risk-off movement."
The Dow Jones Industrial Average fell 418.29 points, or 1.62%, to 25,358.32, the S&P 500 lost 47.77 points, or 1.67%, to 2,808.5 and the Nasdaq Composite dropped 157.90 points, or 2.04%, to 7,592.94.
Stocks have succumbed to selling pressure in May after Washington and Beijing engaged in tit-for-tat tariffs and other retaliatory measures, with the S&P 500 on track to post its first monthly decline since the December sell-off.
Shares of NetApp Inc tumbled 9.0%, the second-biggest percentage drop on the S&P 500, after the data storage equipment maker forecast current-quarter profit and revenue below Wall Street estimates.
L Brands Inc shares jumped 11.8% after the owner of Victoria's Secret and Bath & Body Works reported better-than-expected quarterly earnings.
Declining issues outnumbered advancing ones on the NYSE by a 4.24-to-1 ratio; on Nasdaq, a 4.64-to-1 ratio favoured decliners.
The S&P 500 posted 23 new 52-week highs and 27 new lows; the Nasdaq Composite recorded 19 new highs and 177 new lows.
(Reporting by April Joyner; Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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