U.S. stocks declined on Thursday, with the Dow Jones Industrial Average dropping over 200 points, as worries mounted about China’s economy and escalating tensions in Ukraine.
“The New York Times broke a story that Russian forces were conducting new military operations near the Ukrainian border. That news probably triggered the hard downside move in the averages, which had already given back a good part of the opening rally,” Elliot Spar, market strategist at Stifel, Nicolaus, wrote in afternoon commentary.
And, Reuters cited banking and industry sources in reporting increasing concerns about the financial health of bloated industries in China have caused many banks to reduce lending in these sectors up to 20 percent.
Alan Skrainka, chief investment officer at Cornerstone Wealth Management, pointed to a chart making the email rounds showing the correlation between NYSE margin debt and the S&P, with margin debt exceeding its 2007 peak.
“It has people a little shook up; there’s speculative froth in the market that needs to be worked out,” said Skrainka, who added the source for the chart was Jeffrey Gundlach, the founder of Doubleline Capital.
The CBOE Volatility Index (VIX), a measure of investor uncertainty, gained 12 percent to 16.18.
“Since the beginning of March, the action has been poor all around. We’re in a bit of a vacuum, and will probably have to wait until earnings season to get a boost,” said Dan Greenhaus, chief global strategist at BTIG.
Ever since the spike in late February, the market has been trending lower. “I’m not sure there’s any theme to that, we’re just in a general malaise, after a pretty good recovery from the EM (emerging market) action,” Greenhaus added.
Krispy Kreme Doughnuts jumped after hiking its yearly outlook. Williams-Sonoma gained after the seller of upscale cookware and home furnishings projected 2014 sales above expectations. Dollar General dropped after the discount retailer posted lower-than-expected sales for the holiday quarter. Amazon.com rose after the online retailer hiked the cost of its Prime membership. Goldman Sachs Group fell 1.7 percent after S&P Capital IQ downgraded its shares to sell from buy.
|DJIA||Dow Jones Industrial Average||16108.89||-231.19||-1.41%|
|S&P 500||S&P 500 Index||1846.34||-21.86||-1.17%|
|NASDAQ||Nasdaq Composite Index||4260.42||-62.91||-1.46%|
After a 64-point rise, the Dow Jones Industrial Average fell as much as 255 points, and ended down 231.19 points, or 1.4 percent, at 16,108.89. Pfizer led declines that included all of the blue-chip index’s 30 components.
After coming within four points from its record close, the S&P 500 shed 21.85 points, or 1.2 percent, to 1,846.35, with technology falling hardest and utilities the sole sector on the rise among its 10 major sectors.
The Nasdaq declined 62.91 points, or 1.5 percent, to 4,260.42.
For every stock rising, more than two fell on the New York Stock Exchange, where 692 million shares traded. Composite volume approached 3.6 billion.
On the New York Mercantile Exchange, gold futures for April delivery rose $1.90, or 0.1 percent, to $1,372.40 an ounce; crude-oil futures for April delivery rose 21 cents, or 0.2 percent, to $98.20 a barrel.
In Washington Thursday, U.S. Secretary of State John Kerry told a Senate panel told the U.S. and Europe would take “very serious” action after the vote this weekend on whether Crimea would leave Ukraine if there is “no sign” that the crisis would be resolved.
Also on Capitol Hill, Stanley Fischer, nominated to serve as vice chairman of the Federal Reserve, told the Senate Banking Committee the central bank has to conform to to market responses as it reduces stimulus
Ahead of the open, stock-index futures added to gains after the Commerce Department reported retail sales gained 0.3 percent in February after a 0.6 percent decline the prior month, with the latter figure bigger than initially estimated.
“Retail sales in February were a touch better-than-expected but January was revised lower by a greater amount, so taken together, a bit softer than forecast,” emailed Peter Boockvar, chief market analyst at the Lindsey Group.
Another report, this one from the Labor Department, had applications for jobless benefits unexpectedly declining last week, by 9,000 to 315,000.
The retail-sales report was “a good indication that the economy is beginning to rebound from the winter chill,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
And, the claims report is “another indication that the labor market is healing and should expand. We should see creation of new jobs move above 200,000 to about 250,000 on a monthly basis,” Cardillo said.
A third economic report Thursday had business inventories rising 0.4 percent in January, in line with expectations.
U.S. stocks were little changed on Wednesday, but the Nasdaq Composite derailed a four-session losing streak, as investors mulled the economic climate and tracked events in Ukraine.
—By CNBC’s Kate Gibson
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Earnings: Ann, the Buckle
8:30 a.m.: PPI
9:55 a.m.: Consumer sentiment
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