Politics
ACN

US STOCKS-Wall St drops as Fed, weak earnings fan growth worries

(For a live blog on the U.S. stock market, click LIVE/ ortype LIVE/ in an Eikon news window.)

* High-growth technology and health stocks lead slide

* Consumer stocks hit by higher borrowing cost worries

* Accenture down on disappointing full-year outlook

* Indexes down: Dow 1.12 pct, S&P 0.99 pct, Nasdaq 1.39 pct (Adds comment, details, updates prices)

By Medha Singh

Dec 20 (Reuters) - U.S. stocks dropped over 1 percent onThursday, with the S&P 500 languishing at 15-month lows, asdisappointing earnings reports added to the gloom after theFederal Reserve quashed hopes of a toned-down approach to itsinterest-rate hike trajectory.

The Fed's move on Wednesday to largely adhere to its planfor additional rate hikes over the next two years and keep itsbalance sheet-reduction plan on "autopilot" spooked investorsalready worried about slowing economic growth.

The high-growth S&P healthcare .SPXHC and technology .SPLRCT sectors led the declines, falling 0.93 percent and1.49 percent, respectively.

Consumer discretionary stocks .SPLRCD slid 1.72 percentand consumer staples .SPLRCS dropped 0.95 percent as higherborrowing costs added to signs of slowing consumer spending inthe run-up to Christmas.

Nike IncNKE.N dropped 1.6 percent ahead of itssecond-quarter results expected after markets close.

The specter of rising borrowing costs only adds to worriesof slowing corporate profit growth as economic growth slackens,with increasing fears of a recession, in the backdrop of theChina-U.S. trade war and other geopolitical concerns.

"All people are talking about today is the aftermath of theFed hike. The fact that Fed just killed the notion that they arehere to backstop the market," said Michael Antonelli, managingdirector, institutional sales trading at Robert W. Baird inMilwaukee.

"People are just trying to fall back on technicals now thatfundamentals seem a little chaotic. We're still dealing with astock market crash and it's going to be with us for a while.This isn't going to end in a quick fashion."

At 11:29 a.m. ET, the Dow Jones Industrial Average .DJI was down 260.26 points, or 1.12 percent, at 23,063.40, the S&P500 .SPX was down 24.83 points, or 0.99 percent, at 2,482.13and the Nasdaq Composite .IXIC was down 92.54 points, or 1.39percent, at 6,544.29.

The Dow Jones Transport Average .DJT , considered abarometer of economic activity, was down 0.47 percent, afterending Wednesday nearly 21 percent below its record high, inbear territory.

The only gainers among the 11 major S&P sectors were thedefensive utilities .SPLRCU and real estate .SPLRCR sectors.

At current levels, the utilities index is poised to overtakehealth as the best performing sector for the year. All the othernine sectors are lower.

Earnings reports were also not encouraging.

Shares of Walgreens Boots Alliance IncWBA.O dropped 3.55percent as the drugstore chain's same-store sales missedestimates.

Conagra Brands IncCAG.N tumbled 11.33 percent, the moston the S&P, after the packaged foods maker missed salesestimates on delayed shipments and weak demand.

Accenture PlcACN.N fell 4.30 percent as its full-yearrevenue and profit outlook were largely below estimates.

Declining issues outnumbered advancers for a 2.37-to-1 ratioon the NYSE and a 2.63-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 130 newlows, while the Nasdaq recorded three new highs and 522 newlows. (Reporting by Medha Singh in Bengaluru; Editing by ShounakDasgupta) ((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780,outside U.S. +91 80 6749 1130; Reuters Messaging:medha.singh.thomsonreuters.com@reuters.net))


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

ACN

Other Topics

World Markets Stocks US Markets

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More