NEW YORK, Feb 7 — US stocks fell today weighed down by the technology sector, as fears of a global slowdown were rekindled after the European Union cut its economic growth forecasts, while a slew of dismal quarterly reports also added to woes.
The European Commission said euro zone growth will slow to 1.3 per cent this year from 1.9 per cent in 2018, because of an expected slowdown in the largest countries of the bloc, partly due to global trade tensions.
“This is clearly raising concerns about global growth slowdown that we’ve been worrying about over the last several months and Europe is in the forefront of that,” said Aaron Clark, portfolio manager at GW&K Investment Management.
World stocks have been roiled by a US trade war since early 2018, but optimism that a trade deal could be reached before a March 2 deadline, when additional tariffs kick in, has helped recent gains in the markets.
The next round of trade discussions will take place in Beijing in the coming week.
The technology sector, which has helped support the market in the past four days, fell 1.21 per cent.
Marquee names such as Facebook Inc, Apple Inc , Amazon.com Inc, Netflix Inc and Alphabet Inc fell between 1 per cent and 1.9 per cent.
Still, the stellar run in stocks has pushed the S&P 500 up about 8 per cent this year, boosted in part by fourth-quarter earnings which have been largely upbeat.
Of the 282 S&P 500 companies that have reported results, about 70 per cent have topped earnings estimates, according to IBES data from Refinitiv.
At 9.40am ET the Dow Jones Industrial Average was down 180.95 points, or 0.71 per cent, at 25,209.35, the S&P 500 was down 21.57 points, or 0.79 per cent, at 2,710.04 and the Nasdaq Composite was down 75.67 points, or 1.03 per cent, at 7,299.61.
All major S&P sectors were lower, with the defensive consumer staples, real estate and utilities sectors posting the smallest losses.
US regional lender BB&T Corp said it would buy rival SunTrust Banks Inc for about US$28 billion in stock. SunTrust jumped 11 per cent, while BB&T rose 4.95 per cent.
Despite these gains the S&P 500 banks sub-sector was down 0.2 per cent as Wall Street’s big lenders such as JPMorgan Chase & Co and Bank of America Corp fell.
On the earnings front, handbag maker Tapestry Inc plunged 17.35 per cent, the most on the S&P 500, after it cut full-year adjusted profit blaming a slowing global economy.
Twitter Inc dropped 10.71 per cent after the company forecast first-quarter revenue below estimates and reported a drop in users for the fourth quarter.
Declining issues outnumbered advancers for a 3.34-to-1 ratio on the NYSE and for a 2.35-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 15 new highs and 13 new lows. — Reuters
