By Medha Singh
Dec 20 () - U.S. stocks dropped over 1 percent on Thursday, with the S&P 500 languishing at 15-month lows, as disappointing earnings reports added to the gloom after the Federal Reserve quashed hopes of a toned-down approach to its interest-rate hike trajectory.
The Fed's move on Wednesday to largely adhere to its plan for additional rate hikes over the next two years and keep its balance sheet-reduction plan on "autopilot" spooked investors already worried about slowing economic growth.
Consumer discretionary stocks slid 1.72 percent and consumer staples dropped 0.95 percent as higher borrowing costs added to signs of slowing consumer spending in the run-up to Christmas.
Nike Inc dropped 1.6 percent ahead of its second-quarter results expected after markets close.
The specter of rising borrowing costs only adds to worries of slowing corporate profit growth as economic growth slackens, with increasing fears of a recession, in the backdrop of the China-U.S. trade war and other geopolitical concerns.
"All people are talking about today is the aftermath of the Fed hike. The fact that Fed just killed the notion that they are here to backstop the market," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
"People are just trying to fall back on technicals now that fundamentals seem a little chaotic. We're still dealing with a stock 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 was down 260.26 points, or 1.12 percent, at 23,063.40, the S&P 500 was down 24.83 points, or 0.99 percent, at 2,482.13 and the Nasdaq Composite was down 92.54 points, or 1.39 percent, at 6,544.29.
The Dow Jones Transport Average, considered a barometer of economic activity, was down 0.47 percent, after ending Wednesday nearly 21 percent below its record high, in bear territory.
The only gainers among the 11 major S&P sectors were the defensive utilities and real estate sectors.
At current levels, the utilities index is poised to overtake health as the best performing sector for the year. All the other nine sectors are lower.
Earnings reports were also not encouraging.
Shares of Walgreens Boots Alliance Inc dropped 3.55 percent as the drugstore chain's same-store sales missed estimates.
Conagra Brands Inc tumbled 11.33 percent, the most on the S&P, after the packaged foods maker missed sales estimates on delayed shipments and weak demand.
Accenture Plc fell 4.30 percent as its full-year revenue and profit outlook were largely below estimates.
Declining issues outnumbered advancers for a 2.37-to-1 ratio on the NYSE and a 2.63-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 130 new lows, while the Nasdaq recorded three new highs and 522 new lows.