Stocks Pulled Down by Energy, Materials Sectors
August 15 2018 - 7:46PM
Dow Jones News
By Ben St. Clair and Amrith Ramkumar
U.S. stocks tumbled Wednesday in a broad selloff led by the
energy and materials sectors, as the Dow Jones Industrial Average
and S&P 500 posted their fifth decline in the past six
sessions.
After mostly rising to start the month on the back of strong
corporate-earnings reports, U.S. stocks have been pressured in
recent sessions as investors worry that Turkey's economic crisis
could spread to other emerging markets.
Some investors expect steady U.S. earnings and economic growth
to continue supporting major indexes, but analysts say the market
is starting to pay more attention to the challenges gripping other
countries.
"The level of growth was so far above a sustainable trend that
the only logical thing to assume was that it was going to moderate
a bit," said Jonathan Golub, chief U.S. equity strategist at Credit
Suisse.
The S&P 500 slumped 21.59 points, or 0.8%, to 2818.37, while
the Dow industrials declined 137.51 points, or 0.5%, to 25162.41.
The S&P 500 is up less than 0.1% during August, while the blue
chips -- which are more sensitive to trade tensions -- are down 1%.
The technology-heavy Nasdaq Composite fell 96.78 points, or 1.2%,
to 7774.12 Wednesday and is up 1.3% month to date.
Commodities, including oil and metals prices, also dropped
sharply Wednesday, putting pressure on energy and materials
companies in the S&P 500. Those sectors fell 3.5% and 1.6%,
respectively.
Only the utilities, telecom, real-estate and consumer-staples
sectors rose in the S&P 500. All four groups are considered
safety plays because of their hefty dividend yields.
"The story for this week is clearly centered on Turkey, tariffs,
the dollar and weakness in the equity market," said Kevin Giddis,
head of fixed income capital markets at Raymond James, in a
note.
Investors were also weighing economic data showing Americans
boosted their spending in July, a robust start for consumer
spending in the third quarter amid a strong labor market and
consumer confidence.
Among individual stocks, Macy's dropped $6.67, or 16%, to $35.15
after the department-store operator reported a slight drop in sales
in the latest quarter as it tried to strengthen its
bricks-and-mortar business with store remodels and off-price
locations. The shares dragged down a number of other retail stocks,
including Kohl's and Gap.
Earnings reports from other retailers, including Walmart, J.C.
Penney and Nordstrom, are on deck for Thursday.
Corona brewer Constellation Brands slumped 13.54, or 6.1%, to
208.27 after saying it is investing $4 billion into Canadian
marijuana grower Canopy Growth, a big wager on the potential for
cannabis-infused drinks and other products.
Chipotle Mexican Grill rose 32.57, or 6.6%, to 525.89 after
Morgan Stanley analysts upgraded the burrito chain's shares to
"overweight," saying the company has a clear path to recovery
thanks to new management and "low-hanging" opportunities to drive
sales.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
(END) Dow Jones Newswires
August 15, 2018 19:31 ET (23:31 GMT)
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