By Lewis Krauskopf
The S&P 500 fell for an eighth straight session on Thursday, its longest losing streak since the 2008 financial crisis, as Facebook shares weighed and investors grappled with uncertainty over next week's U.S. presidential election.Facebook shares tumbled 5.7 percent as the world's largest online social media network warned that revenue growth would slow this quarter.The stock was the biggest drag on the S&P 500 as well as on the tech-heavy Nasdaq, which also posted its eighth straight day of losses.Investors have been unnerved by signs the U.S. presidential race between Democrat Hillary Clinton and Republican Donald Trump is tightening, after Clinton had until recently been thought to have a clear lead.Two polls showed Clinton maintaining a narrow lead nationally ahead of the Nov. 8 election, echoing other polls that have shown Clinton with a slimmer lead since the re-emergence last week of a controversy over her use of a private email server while secretary of state.“The polls have tightened and now the concern is more about what might a Trump presidency look like and the market hasn’t quite priced that in," said Ernie Cecilia, chief investment officer of Bryn Mawr Trust in Bryn Mawr, Pennsylvania. “Given the fact that the election is five days away, that’s what’s driving near-term behavior right now.”The S&P 500 lost 9.28 points, or 0.44 percent, to 2,088.66 and the Nasdaq Composite dropped 47.16 points, or 0.92 percent, to 5,058.41.
The Dow Jones industrial average, which does not include Facebook among its components, fell 28.97 points, or 0.16 percent, to 17,930.67.The CBOE Volatility Index, a gauge of near-term investor anxiety, climbed 14 percent to its highest level in more than four months.The spike in volatility "tells you people are buying protection, there is a little bit more concern," said Matt Jones, U.S. head of equity strategy at J.P. Morgan Private Bank in New York. "You just have a buyers' strike right now and people waiting for the results next week to reposition themselves going forward."In a negative technical sign for the market, the combined number of 52-week lows on the NYSE and the Nasdaq significantly outpaced the number of new highs.
Investors were also digesting Wednesday's policy statement from the Federal Reserve, which firmed expectations for an interest rate hike in December.With its recent slide, the S&P 500's 2016 gain has been trimmed to 2.2 percent."To have a pullback is just natural and normal and healthy for the market," said Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York. "Considering the fact that we are talking about a highly publicized presidential election and we’re talking about raising interest rates in December, those are all factors that can lead to this type of activity," Corpina said.
The S&P healthcare sector ended down 1 percent as a report of a U.S. government pricing probe spooked shares of several drugmakers.In earnings news, Fitbit shares sank 33.6 percent after the wearable fitness device maker's revenue forecast for the holiday shopping quarter fell well below estimates.Roughly 7.4 billion shares changed hands in U.S. exchanges, above the 6.5 billion daily average over the last 20 sessions.Declining issues outnumbered advancing ones on the NYSE by a 1.52-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored decliners.The S&P 500 posted 3 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 35 new highs and 208 new lows. (Reporting by Chuck Mikolajczak in New York and Tanya Agrawal in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)
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Updated Date: Nov 04, 2016 04:00 AM