U.S. stocks fell Tuesday as sinking oil prices hit energy companies, tech hardware continued to plunge with Apple Inc. leading the way, and retailers saw little joy from the coming Christmas shopping season. Treasuries advanced with the dollar and gold fell.
All major benchmarks were down more than 1.5 percent. The S&P 500 index briefly slid 10 percent below its September record close before clawing back just above the threshold. The Nasdaq Composite Index was almost 14 percent below the closing high it reached in August. And the Dow Jones Industrial Average shed more than 500 points, or 2.1 percent, as angst spread across global equity markets.
"The fact that we haven't seen a fast bounce or hard bounce, shows the market is exploring where prices should be," Brad McMillan, chief investment officer for Commonwealth Financial Network. "But it's hopefully a sign that we're starting to find a bottom here."
Investors pointed to escalating trade tensions, signs of a looming slowdown in retail growth and cracks in the credit market as reasons for the decline. Tech hardware was the worst performing group in the S&P 500, followed by transportation and energy as oil slid to its lowest price in more than a year. The Nasdaq 100 Index fell as much as 3 percent early in the session but retraced almost half the decline during the afternoon.
"There's clearly a concern about a global growth slowdown," said Alec Young, managing director of global markets research at FTSE Russell. "Not so much in the U.S., but internationally driven. Trade has an impact on the tech supply chain, so it's impacting the technology sector. The market wants more dovish Fed talk. The Fed has been giving guidance based on the U.S. economy, but in recent months the market has become more focused on the global growth slowdown, and we haven't heard about that from the Fed."
Here are some of the equity moves:
- Apple slumped again, down almost 5 percent, bringing its plunge from a recent high to around 24 percent.
- Target fell 11 percent after its sales forecast disappointed; Kohl's and L Brands also sank on weak earnings.
- Union Pacific slid 6 percent, its third consecutive decline, while Norfolk Southern Corp. and CSX both were lower as well.
- Devon Energy sank more than 7 percent to the lowest since April 2016, and Marathon Oil Corp. lost over 6 percent.
- "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."
WTI crude slipped below $54 for the first time since October 2017. In bond markets, the yield on 10-year Treasuries 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 sell-off 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, head 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.
It's a shortened trading week because of the Thanksgiving holiday in the U.S. on Thursday. In addition, Black Friday, the day after Thanksgiving, marks the traditional start to the U.S. holiday shopping season.
These are the main moves in markets:
- The S&P 500 declined 1.8 percent to 2,641.89, while the Dow Jones Industrial Average fell 552 points, or 2.2 percent, to 24,465.64.
- The Stoxx Europe 600 index sank 1.1 percent, hitting the lowest since December 2016.
- The U.K.'s FTSE 100 index retreated 1.3 percent.
- Germany's DAX index lost 1.6 percent, reaching the lowest in almost two years.
- The MSCI Emerging Market index dropped 1.7 percent.
- The MSCI Asia Pacific index slid 1.3 percent, the biggest decrease in two weeks.
- The Bloomberg Dollar Spot index gained 0.5 percent.
- The euro dropped 0.8 percent to $1.1367, the first retreat in more than a week.
- The British pound declined 0.6 percent to $1.2783.
- The Japanese yen fell 0.1 percent to 112.70 per dollar.
- The yield on 10-year Treasuries declined one basis point to 3.0537 percent, the lowest since September
- Germany's 10-year yield dipped two basis points to 0.35 percent.
- Britain's 10-year yield advanced one basis point to 1.383 percent.
- West Texas Intermediate crude slid 6.1 percent to $53.32 a barrel, the lowest since October 2017.
- Gold fell 0.2 percent to $1,221.95 an ounce.