The benchmark S&P 500 index has slumped more than 5 percent in the last six days and is now 15 percent below the peak it reached in late September. After steady gains through the spring and summer, stocks have slumped in the fall as investors worry that global economic growth is cooling off and that the
Markets are also concerned about twin threats that could make the situation even worse: the ongoing trade dispute between the
On Wednesday, stocks gave up an early gain and ended up with big losses after the Federal Reserve raised interest rates for the fourth time this year and signaled it was likely to continue raising rates next year, although at a slower rate than it previously forecast.
Investors are responding to a weakening outlook for the
At the same time, the lower bond yields can send a negative signal on the economy. The bond market has correctly predicted previous
Stocks took sharp losses right after trading started on Thursday, but settled down soon thereafter. In the first hour of trading, the S&P 500 index was down 9 points, or 0.4 percent, to 2,498.
The Dow Jones Industrial Average fell 147 points, or 0.6 percent, to 23,172. The Nasdaq composite fell 18 points, or 0.2 percent, to 6,620.
The Russell 2000 index of smaller companies slid 5 points, or 0.4 percent, to 1,344.
Smaller company stocks have been crushed during the recent market slump because slower growth in the
The Russell 2000 is now down 23 percent from the peak it reached in late August and it’s down 12 percent for the year to date, twice the loss of the S&P 500 index, which tracks large companies.
Oil prices continued to retreat. They’ve dropped about 40 percent since early October as the slowing global economy and rising production have knocked prices down.
Bond prices were mixed. The yield on the two-year Treasury note rose to 2.66 percent from 2.65 percent, but the yield on the 10-year note fell to 2.76 percent from 2.77 percent.
The gap between those two yields has been shrinking this year. When the 10-year yield falls below the two-year yield, investors call it an “inverted yield curve.” That is often interpreted as a sign a recession is coming, although it’s not a perfect signal, and when recessions do follow inversions in the yield curve, it can take a year or more.
Health care and household goods companies were taking some of the largest losses after weak results from companies including Walgreens and Conagra. Both of those companies reported disappointing sales, and Conagra sank 9.5 percent to $26.33 while
The dollar fell to 111.64 yen from 112.36 yen. The euro rose to $1.1455 from $1.1368. The British pound rose to $1.2654 from $1.2621.
Technology companies, which have suffered severe losses since early October, did a bit better than the rest of the market Thursday.
Canadian marijuana grower
On Tuesday Tilray stock jumped 16 percent after it announced a medical marijuana products partnership with drugmaker
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP