Technology and health care companies drove a broad slide in U.S. stocks Wednesday, erasing some of the market’s solid gains from a day earlier.
The sell-off put the Dow Jones Industrial Average on track to end the month with a loss and marked the second drop for the benchmark S&P 500 index this week.
While U.S. stocks remain on track to finish the quarter with solid gains, investors remain anxious over the slowing global economy and worrisome signals coming from the bond market.
The yield on the benchmark 10-year Treasury note continued to decline Wednesday, dropping to 2.38 percent from 2.41 percent late Tuesday. That remained below the yield on the three-month Treasury bill. When that kind of “inversion” in bond yields occurs, economists fear it may signal a recession within the coming year.
“The S&P 500 attempted to rally right out of the open, but then started to give back ground,” said Jeramey Lynch, global investment specialist at J.P. Morgan Private Bank. “The focus still continues to be on rates, particularly in the lower end of the curve, and with rates still heading down the market is having a tough time bucking that trend.”
The S&P 500 dropped 13.09 points, or 0.5 percent, to 2,805.37. Even with the latest slide, the index is up 11.9 percent so far in 2019, an unusually strong start to the year.
The Dow slid 32.14 points, or 0.1 percent, to 25,625.59. That came after a day of wavering, having been up as much as 100 points and down as much as 232 points.
The Nasdaq composite lost 48.15 points, or 0.6 percent, to 7,643.38. The Russell 2000 index of smaller company stocks gave up 5.93 points, or 0.4 percent, to 1,522.23.
Major European indexes closed mixed. Investors were keeping a close eye on developments in Britain, where lawmakers debated various alternatives for the country’s split from the European Union.
In addition to Brexit, investors are still waiting to see how the U.S. and China will resolve their costly trade dispute, with high-level talks between Washington and Beijing scheduled to resume Thursday. They’re also looking ahead to the next batch of corporate earnings reports, which start to roll in next week.
Chipmakers were among the big technology sector decliners. Advanced Micro Devices fell 3.1 percent and Micron Technology dropped 2.7 percent.
Banks declined as bond yields fell, which cut into lenders’ ability to charge higher rates on loans. Bank of New York Mellon fell 1.5 percent.
Centene led the slide in health sector stocks, giving up 5 percent, after agreeing to buy WellCare Health Plans for more than $15 billion. Both companies are big players in the Affordable Care Act market. The deal comes two days day after the Trump administration attacked the ACA in court, saying that former President Barack Obama’s health care law should be declared unconstitutional. WellCare Health Plans jumped 12.3 percent.
Industrial sector stocks bucked the broader market decline, led by gains in airlines. Southwest Airlines rose 2.2 percent, Delta Air Lines added 1.8 percent and American Airlines Group picked up 2.4 percent.
Homebuilders also marched broadly higher, getting help from lower bond yields. Mortgage rates tend to move along with the yield on the 10-year Treasury note, and lower mortgage rates make it easier for would-be buyers to purchase a home.
The sector also got a boost from news that mortgage applications rose sharply last week as the average rate for a 30-year fixed-rate home loan declined from a week earlier.
LGI Homes climbed 5.6 percent and PulteGroup rose 5.1 percent.
Traders also bid up shares in Shoe Carnival after the retailer’s fourth-quarter earnings and revenue exceeded analysts’ forecasts. The stock vaulted 22.4 percent.
Oil and gas futures closed lower. Benchmark U.S. crude fell 0.9 percent to settle at $59.41 a barrel. Brent crude, used to price international oils, dropped 0.2 percent to close at $67.83 a barrel.
Wholesale gasoline gave up 3.1 percent to $1.90 a gallon, heating oil slipped 0.5 percent to $1.98 a gallon and natural gas fell 1 percent to $2.71 per 1,000 cubic feet.
Gold lost 0.3 percent to $1,310.40 an ounce, silver dropped 0.8 percent to $15.30 an ounce and copper added 0.3 percent to $2.86 a pound.
The dollar weakened to 110.36 yen from 110.52 Japanese yen on Tuesday. The euro fell to $1.1263 from $1.1278.
