U.S. shares extended their slide on Tuesday as losses in energy and retail stocks combined with another drop in Apple to deepen worries about slowing growth and fading momentum in the market’s biggest names.
The sell-off pushed the Nasdaq to its lowest close in more than seven months. The S&P 500 and the Dow also finished at their weakest levels since late October, after a sharp pullback in technology stocks the previous day rattled confidence in the sector that had powered much of the long bull run.
Apple fell 4.8 percent to its lowest level since early May as concerns persisted over softer iPhone demand. The stock has now lost more than 20 percent of its value, or about $250 billion, since its Oct. 3 record close.
Retail earnings added to the pressure. Target dropped 10.5 percent after third-quarter profit missed analysts’ estimates, with the company citing spending on its online business, higher wages and price cuts that hurt margins. Kohl’s fell 9.2 percent after its full-year profit forecast came in below expectations.
Other retailers also weakened. Lowe’s lost 5.7 percent after announcing more restructuring plans in response to worse-than-expected sales. TJX Cos slipped 4.4 percent after its holiday-quarter earnings outlook fell mostly below estimates, while Ross Stores declined 9.4 percent after forecasting fourth-quarter same-store sales below analysts’ expectations.
Energy shares were another major drag. The S&P energy index fell 3.3 percent, while U.S. oil prices dropped 6.6 percent on concerns about rising global supply. The S&P 500 retail index fell 2.7 percent, marking its eighth straight session of losses.
The Dow Jones Industrial Average fell 551.8 points, or 2.21 percent, to 24,465.64. The S&P 500 lost 48.84 points, or 1.82 percent, to 2,641.89, and the Nasdaq Composite dropped 119.65 points, or 1.7 percent, to 6,908.82.
“It’s a combination of all of the various concerns coming together to force investors out of the overall market,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. He added that heavy volume on a down day can sometimes signal “an initial sign of capitulation,” suggesting the sell-off may be nearing an end.
Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey, said the market was adjusting to an early 2019 outlook shaped by growing concern over global growth. “U.S. growth is not weakening dramatically but slowing,” she said.
By the close, the S&P 500 and Dow had moved into negative territory for 2018. The Dow was down about 1 percent for the year, while the S&P 500 had fallen 1.1 percent since Dec. 31.
Trading volume was heavy, with about 9.0 billion shares changing hands on U.S. exchanges, above the 8.6 billion-share average for the previous 20 trading days.
Decliners outnumbered advancers on the NYSE by 5.70 to 1, while Nasdaq decliners beat gainers by 3.16 to 1. The S&P 500 recorded 20 new 52-week highs and 41 new lows, and the Nasdaq Composite posted 11 new highs and 291 new lows.
Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all closed sharply lower as investors rotated out of risk assets.
