USA stock indexes moved lower in morning trading Thursday, pulled down by a slide in technology firms, retailers and other consumer-focused companies.
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The Japanese stock market drifted lower after opening in positive territory on Friday, with investor sentiment dented by North Korea’s suspected nuclear test and the European Central Bank’s decision to not extend quantitative easing.
The Dow Jones industrial average sank almost 400 points, its worst single-day loss since June. The Standard & Poor’s 500 index slid 53.49 points, or 2.5 per cent, to 2,127.81. The Nasdaq composite fell 39 points, or 0.8 percent, to 5,218. The tech-heavy index set all-time highs on Tuesday and Wednesday.
On Wall Street, stocks closed modestly lower on Thursday following the European Central Bank’s decision to leave interest rates unchanged. Draghi could indicate Thursday that the bank is ready to extend the bond-buying program. At a news conference, ECB President Mario Draghi seemed relatively confident about the economy and less inclined to hint at more stimulus than some analysts had expected.
“It’s been many, many days since we’ve had a substantive move either to the upside or the downside in the market”, said Erik Davidson, chief investment officer for Wells Fargo Private Bank.
BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury rose to 1.6% from 1.54% late on Wednesday.
“The tech sector has been strong and outside of today continues to be strong”, said Willie Delwiche, an investment strategist at Baird. USA stocks fell broadly in early trading Friday, Sept. 9, 2016, pulled down by sharp declines in utilities and consumer-focused companies.
ROUGH REPORT: Pier 1 Imports tumbled 13.5 percent after the home decor retailer gave weak quarterly guidance and said its president and CEO will be leaving the company at the end of the year by mutual agreement with the board. Transocean shed 57 cents, or 5.4 percent, to $9.90, while Marathon Oil slid 86 cents, or 5.2 percent, to $15.88.
DEAL-MAKING: Investors got a dash of tech sector deal news.
NEVER MIND: Williams Cos. fell 3.7 percent on news that Enterprise Products Partners has told the natural gas company it is no longer interested in a possible merger. Private equity firm TPG will invest $1.1 billion in the new company and own a majority stake. The stock shed 2.84 dollars (£2.14) to 105.52 dollars (£79.33).
HANDSOME RESULTS: Tailored Brands surged 21.2 percent after the menswear retailer reported solid quarterly results and maintained its forecasts for the year. Seoul’s Kospi advanced 0.1 percent to 2,063.73 and India’s Sensex added 0.3 percent to 29,003.95. Energy stocks slumped as crude oil prices headed lower.
COSTLY DEFECT: General Motors fell 2.7 percent after the automaker said it is recalling about 4 million vehicles worldwide to fix an air bag software defect that has been linked to one death. In other energy trading, wholesale gasoline fell 6 cents to $1.36 a gallon. Benchmark U.S. crude fell $1.63, or 3.4 percent, to $46.01 a barrel.
Several oil drilling and production companies rose on the latest oil stockpiles figures, pushing the S&P 500’s energy sector 1.7 percent higher. The sector is up 17.5 percent this year. Diamond Offshore Drilling led the decliners in the S&P 500, losing 89 cents, or 5.1 percent, to $16.51. Imports expanded by an unexpectedly strong 1.5 percent, up from July’s 12.5 percent plunge.
ECB WATCH: The decision by the ECB to keep policy unchanged wasn’t a huge surprise but some in the markets had been hoping there would have been an extension to the stimulus program. Sony is down nearly 1 percent, Panasonic is declining 0.3 percent and Canon is losing 0.5 percent, while Toshiba is advancing nearly 1 percent. The FTSE 100 index of leading British shares was up 0.2 percent. Japan’s benchmark Nikkei 225 rebounded from an initial drop to finish little changed, while Hong Kong’s Hang Seng rose 0.8 percent. The central bank faces stubbornly low annual inflation of only 0.2 percent despite pumping 1 trillion euros ($1.1 trillion) in newly printed money into the banking system through bond purchases since March, 2015.
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METALS: Among metals, gold slid $7.60 to $1,341.60 an ounce, while silver fell 17 cents to $19.68 an ounce. Copper dipped a penny to 2.09 dollars a pound.
