DWDP - Stocks Wither amid Global Growth Concerns
Stocks fell on Thursday as a cut in the euro zone growth forecast reignited fears that the global economy may be slowing down.
The Dow Jones Industrial Average subtracted 128.56 points to 25,261.74, as DowDuPont lagged.
The S&P 500 lost 18.41 points to 2,713.20, led lower by the energy sector.
The NASDAQ Composite dawdled 54.16 points to 7,321.12.
The European Commission slashed its growth outlook for the euro zone this year as it expects the bloc's largest economies to be held back by global trade tensions, among other issues. The Commission said euro zone growth will slow to 1.3% this year from 1.9% in 2018, before rebounding in 2020 to 1.6%.
That growth outlook sparked worries that the global economy could be slowing down. Similar fears contributed to the market's sharp downturn in December. That decline briefly sent the S&P 500 into bear-market territory on an intraday basis.
The Bank of England also cut its 2019 outlook and sees the U.K. economy growing at its slowest pace since 2009.
Thursday's decline comes as the corporate earnings season continues. Twitter reported quarterly earnings that beat analyst expectations on Thursday. However, shares of the social media company fell 10.7% as Twitter also issued light guidance. Fiat Chrysler and Cardinal Health are also among the companies that reported better-than-expected earnings.
Companies are reporting solid earnings growth for the fourth quarter with profits showing an increase of 14.1% on a year-over-year basis. Due to those poor forecasts, experts say earnings for the first quarter of 2019 are expected to drop more than 1%.... the first year-over-year decline in earnings in more than two years.
Shares of BB&T and SunTrust Banks bucked the overall negative trend, BB&T picking up 2.7%, and SunTrust gaining 8.6%. The two stocks rose after BB&T agreed to buy SunTrust for more than $28 billion. The deal – the biggest in a decade within the banking sector – creates a $66-billion company and the sixth-largest U.S. bank by assets.
Prices for the benchmark 10-year U.S. Treasury gained ground, lowering yields to 2.67% from Wednesday's 2.7%. Treasury prices and yields move in opposite directions.
Oil prices skidded 90 cents to $53.11 U.S. a barrel.
Gold prices dropped 60 cents to $1,313.80 U.S. an ounce.