U.S. stocks fell, with investors dumping the tech darlings that carried the bull market for much of its record run and retailers that are posting disappointing earnings. Treasuries advanced and oil plunged to its lowest price in 12 months.
The worst of the stock sell-off eased but all major U.S. averages remained lower by at least 1 percent. The S&P 500 Index briefly slid 10 percent below its record close, the Nasdaq Composite Index erased its gain for the year, and the Dow Jones Industrial Average shed more than 300 points as angst spread across global equity markets. Trading was heavy, with volume more than 40 percent above normal for this time over the past 30 days.
Investors pointed to escalating trade tension, signs of a looming slowdown in retail growth and cracks in the credit market, but an indiscriminate dumping of the year’s biggest winners still largely characterized the action. Tech hardware manufacturers and food retailers were the worst performing groups in the S&P 500.
“It’s a fundamentally driven correction,” Mandy Xu, chief equity derivatives strategist at Credit Suisse, said on Bloomberg Television. “People are very concerned about earnings outlooks, not just in tech but broader across all sectors. And as a result, we’re probably not going to get a v-shaped recovery. People are going to probably wait until next quarter’s earnings to see if growth is holding up.”
Here are some of the equity moves:
Apple Inc. slumped again, bringing its plunge from a recent high to more than 20 percent. Amazon.com Inc., Facebook Inc. and Netflix Inc. fell at least 2.5 percent. Chipmakers plunged. Advanced Micro Devices Inc., Micron Inc. and Nvidia Corp. sank more than 5 percent, with Nvidia’s rout since an Oct. 1 high now more than 50 percent. Square Inc. lost 10 percent, Snap Inc. fell 3 percent and Twitter Inc. lost 6 percent. Boeing Co. fell 4 percent to the brink of a bear market. Target Corp. plunged 14 percent after its sales forecast disappointed; Kohl’s Corp. and L Brands Inc. also sank on weak earnings.
“There’s a lot of trade fears, a lot of mega-cap tech selling, and it’s one of those things that happens when there’s a correction,” said Dan Miller, director of equities at GW&K Investment. “I’ve seen this too many times before but there’s enough things out there that people are pointing to and it’s created a heavy level of fear.”
In bond markets, the yield on 10-year Treasurys fell to the lowest level since September. A credit-default swap index of mostly high-yield issuers in Europe reached the highest in almost two years, signaling renewed nerves about the asset class.
The selloff in momentum stocks continued a slump that began last month, with the latest blow coming from renewed concern that demand for Apple’s iPhones has slowed. At the same time, the Trump administration is considering tighter curbs on technology exports, a step that Deutsche Bank AG says would have a “profound and long lasting adverse impact” on relations between the U.S. and China.
And calls for dip-buying have turned into notes of caution. Goldman Sachs recommended investors hold more cash. Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said that investors should expect low returns for a long time after enjoying years of low interest rates from central-bank stimulus.