US stocks close out half-day session with broad losses
Stocks fell broadly on Wall Street Friday following a shortened trading session a day after the Thanksgiving holiday that left the market slightly below its record highs.
Technology, healthcare and industrial stocks accounted for a big slice of the selling. Several big retailers also dragged the market lower as traders watched for signs that Black Friday got off to a strong start. Energy stocks took the heaviest losses as crude oil prices fell sharply. Bond yields rose.
Even with the pullback, the S&P 500 notched its seventh weekly gain in eight weeks. The benchmark index also closed out November with its strongest monthly gain since June.
“You had three solid days, plus the S&P was at an all-time high as of the close on Wednesday,” said Tom Martin, senior portfolio manager with Globalt Investments. “Really, from early October until now, it’s been almost like a ruler straight up.”
The S&P 500 index dropped 12.65 points, or 0.4 per cent, to 3,140.98. The index hit all-time highs the first three days of the week.
The Dow Jones Industrial Average fell 112.59 points, or 0.4 per cent, to 28,051.41. The Nasdaq slid 39.70 points, or 0.5 per cent, to 8,665.47. The Russell 2000 index of smaller company stocks gave up 9.60 points, or 0.6 per cent, or 1,624.50. Trading volume was lighter than usual with the markets open for only a half-day.
Bond prices fell. The yield on the 10-year Treasury rose to 1.77 per cent from 1.76 per cent late Wednesday.
The three major stock indexes have notched multiple record highs in recent weeks. That helped drive their gains in November. The S&P 500 ended the month with a 3.4 per cent gain, while the Dow rose 3.7 per cent. The Nasdaq, which is weighted heavily with technology stocks, gained 4.5 per cent.
The stock market has been grinding mostly higher after shaking off recession fears that helped knock stocks into a skid this summer.
Better-than-expected corporate earnings, solid economic data, and interest-rate cuts by the Federal Reserve helped fuel the market’s fall rally. Investors have also grown more optimistic about the prospects for a trade deal between the United States (US) and China.
New US tariffs are set to kick in on many Chinese-made products as of December 15, but negotiators have said they might soon have a preliminary deal that could avert that.
Chipmakers were among the biggest decliners in the technology sector Friday. Lam Research and Qualcomm each fell 1.5 per cent.
Drugmakers helped pull the health stocks lower. Bristol-Myers Squibb dropped 1.1 per cent.
Energy stocks were the biggest losers as the price of US crude oil slid US4.7 per cent. Devon Energy dropped US 2.8 per cent, and Helmerich & Payne fell 2.3 per cent.
Benchmark crude oil dropped US $2.76 to US $55.39 per barrel. Brent crude oil, the international standard, gave up $2.62 to $60.61 per barrel.
Shares in several big retailers declined as Black Friday, traditionally the kick-off for the holiday shopping season, got under-way. Macy’s fell 1 per cent, Gap dropped 1.8 per cent, Kohl’s slid 2.7 per cent and Nordstrom slipped 0.4 per cent.
Some bucked the downward trend. J.C. Penney rose 1.8 per cent,;Walmart added 0.3 per cent; and TJX, parent of T.J. Maxx, Marshalls, and other stores, gained 0.3 per cent.
This year, retailers have less time to woo consumers because Thanksgiving fell on the fourth Thursday in November, making the holiday shopping season six days shorter.
The National Retail Federation baked the shorter season into its forecast, which calls for holiday sales to rise between 3.8 per cent and 4.2 per cent, an increase from the disappointing 2.1 per cent growth seen in the November and December 2018 period.
“Black Friday really starts on November 1 and goes all the way until the end of December, so you have this two-month period that you really have to look at before you really see how well companies are doing,” Martin said.