Stocks ended modestly lower and bond prices rose on Wall Street Thursday as investors turned cautious, shifting money into lower-risk holdings.
The selling, which lost some of its momentum toward the end of the day, came as traders weighed the implications of the impeachment inquiry into President Donald Trump and new government data showing slower U.S. economic growth.
Communication services, health care and energy stocks accounted for a big slice of the sell-off, which erased some of the market’s gains from the day before.
Consumer product makers, real estate companies and utilities, which are viewed as more defensive sectors, notched gains. Bond prices rose, pulling down the yield on the 10-year Treasury to 1.69% from 1.73% late Wednesday.
The U.S. congressional inquiry into President Trump is throwing more volatility into an already sensitive market, particularly on trade issues. Traders also found no comfort in the Commerce Department’s latest economic snapshot, which showed the U.S. economy grew at a modest 2% in the second quarter, a sharply lower pace than the 3%-plus growth rates seen over the past year.
“We’re giving back, clearly, some of yesterday’s gains,” said Jeramey Lynch, global investment specialist at J.P. Morgan Private Bank. “It’s just the uncertainty.”
The S&P 500 index fell 7.25 points, or 0.2%, to 2,977.62. The Dow Jones Industrial Average slid 79.59 points, or 0.3%, to 26,891.12. The Nasdaq dropped 46.72 points, or 0.6%, to 8,030.66.
Smaller company stocks bore the brunt of the selling, sending the Russell 2000 down 17.33 points, or 1.1%, to 1,533.33.
The S&P 500 and Nasdaq are each on track for their second straight weekly loss as volatile trading brought on by anxiety over trade issues takes its toll. The late September slide has been cutting into quarterly gains for the S&P 500 and all but erased the Nasdaq’s third-quarter gain.
Stocks got off to a mostly lower start Thursday ahead of a televised congressional hearing in the impeachment inquiry into President Trump. The markets fluctuated the rest of the morning, but remained lower through much of the afternoon.
While many analysts say the congressional probe isn’t likely to affect the market significantly, it does add a degree of uncertainty and could complicate the White House’s efforts to resolve trade disputes with China and other nations.
Chinese importers have set deals to buy American soybeans and pork as the governments make conciliatory gestures ahead of trade talks and Trump has suggested a trade deal could happen soon. Nonetheless, investors remain cautious ahead of the next round of trade talks between Washington and Beijing next month.
Separately, Japan and the U.S. signed a deal covering agricultural, industrial and digital trade, but it kept auto tariffs unchanged.
Communication services stocks fell broadly. Facebook slid 1.5% amid concerns that the company could find itself the target of another antitrust investigation.
Health insurers were among the biggest losers. UnitedHealth Group dropped 3% and Cigna slid 3.5%.
Energy stocks also declined. Chevron lost 2.7%.
Technology stocks rebounded after an early slide. The sector has been volatile all week amid investor concerns about the U.S.-China trade war and upcoming negotiations in October. Adobe rose 2.3%.
High-dividend, lower-risk sectors fared better as investors sought safety. Procter & Gamble rose 1.1%, Kimco Realty added 2.4% and Edison International gained 1.6%.
Outside of trade and politics, investors are getting ready for the close of the third quarter and more corporate earnings reports.
“What I’m looking forward to is earnings,” Lynch said. “Earnings are going to give us a look at how the third quarter was, particularly with the consumer.”
Traders got to review a mixed batch of quarterly company report cards Thursday.
Carnival sank 8.6%, the biggest loser in the S&P 500, after the cruise line operator cut its 2019 profit forecast because of a spike in fuel costs. Crude oil prices have risen more than 23% this year on mix of high supplies and tensions between the U.S. and Iran. Other cruise operators also declined. Norwegian Cruise Line slid 3.8% and Royal Caribbean Cruises skidded 2.5%.
Conagra Brands climbed 3.7% after the food maker reported a surprisingly good first quarter profit. The company cited a solid sales increase in frozen foods and a benefit from last year’s purchase of Pinnacle Foods.
Beyond Meat jumped 11.6% as McDonald’s started selling the company’s plant-based burger in Ontario. The move pits Beyond Meat and McDonald’s against Burger King, which is selling a plant-based Impossible Foods burger at its locations.
Investors gave a cool reception to Peloton’s stock market debut. Shares in the New York-based connected exercise machine closed 11.2% below their opening price of $27.
Benchmark crude oil fell 8 cents to settle at $56.41 a barrel. Brent crude oil, the international standard, rose 35 cents to close at $62.74 a barrel. Wholesale gasoline rose 3 cents to $1.66 per gallon. Heating oil climbed 1 cent to $1.96 per gallon. Natural gas fell 9 cents to $2.41 per 1,000 cubic feet.
Gold rose $2.90 to $1,507.50 per ounce, silver fell 16 cents to $17.80 per ounce and copper fell 4 cents to $2.56 per pound.
The dollar was unchanged at 107.81 Japanese yen from Wednesday. The euro weakened to $1.0928 from $1.0942.
Major stock indexes in Europe finished broadly higher after a relatively quiet day for international economic news.