Wall Street declined on Tuesday, snapping a four-day rally, as trade woes, fresh concerns over the state of the global economy and disappointing company forecasts dampened sentiment.
The Dow Jones Industrial Average fell 302 points, or 1.22%, to 24,404. The S&P 500 lost 38 points, or 1.42%, to 2,633 and the Nasdaq Composite dropped 137 points, or 1.91%, to 7,020.
Shares fell as investors took notice of the International Monetary Fund’s Monday report that slashed 2019 global economic growth estimates, and China confirmed its slowest economic growth rate in 28 years.
However, the stock indexes pared losses after White House economic advisor Larry Kudlow denied a report by the Financial Times that the Trump administration cancelled preparatory trade talks with China.
Meanwhile, a partial government shutdown stretched into its 32nd day on Tuesday, and there was little sign of the deadlock breaking.
Of the 11 major sectors of the S&P 500, all but utilities closed lower. Industrials, energy, communications services and consumer discretionary had the largest percentage losses.
Chipmakers fell after the downbeat China news. The Philadelphia SE Semiconductor index declined 2.9%.
Each of the FAANG momentum stocks, Facebook Inc, Apple Inc, Amazon.com, Netflix Inc and Google parent Alphabet Inc, ended down between 1.6% and 4.1%.
Fears of a slowdown in corporate profits mounted as companies posting fourth-quarter results provided disappointing forward-looking projections.
Johnson & Johnson declined 1.4% after its 2019 sales forecast fell short of analyst expectations. Stanley Black & Decker Inc tumbled 15.5% after its disappointing 2019 forecast.
Oilfield services company Halliburton Co declined 3.1% as falling oil prices and slowing US demand weighed on fourth-quarter results.
International Business Machines Corp rose in post-market trading after reporting a smaller-than-expected drop in fourth-quarter revenue.
EBay rallied 6.1% after Elliot Management issued a letter to the company’s management laying out a five-step plan that Elliot said could lead to a valuation of $55 to $63 a share by the end of 2020.
In Asia, shares were trading mixed on Wednesday in morning session on the back of concerns over the state of ongoing US-China trade negotiations.
Japan’s Nikkei 225 fell 0.24% while the Topix index declined 0.37%. Meanwhile, South Korea’s Kospi erased earlier losses to rise 0.22%. In Australia, the ASX 200 was trading nearly flat.
In China, the Shanghai Composite Index gained 0.14%, while Hong Kong’s Hang Seng Index rose 0.42%.