U.S. Stocks Slide as All Sectors in S&P 500 Fall
The S&P 500 posted its biggest one-day drop since May as U.S. stocks fell broadly Thursday.
The losses hit all 11 sectors of the S&P 500, ending a three-day winning streak for the index and putting it on course to decline in the first week of July.
Some investors and analysts have said the 2017 stock rally could stall in the second half of the year, especially if borrowing costs rise but economic growth is mediocre.
In recent weeks, government bond yields have climbed as central banks have signaled the end of monetary stimulus is coming.
"There is a near-unanimous view coming out of central banks for an unwinding of this unconventional policy, either through interest rate rises or pulling back on quantitative easing, or in the United States, selling down some of the central bank holdings," said Paul Flood, multiasset portfolio manager at Newton Investment Management.
"People have finally woken up to the fact there's not a backstop, a forced buyer in the marketplace anymore," he said.
The S&P 500 fell 22.79 points, or 0.9%, to 2409.75 -- its biggest loss since May 17.
The Dow Jones Industrial Average declined 158.13 points, or 0.7%, to 21320.04 and the Nasdaq Composite shed 61.39 points, or 1%, to 6089.46, pressured by declines in technology and biotech shares.
Both indexes notched their biggest declines in a week, and it was the Nasdaq's sixth decline in eight sessions.
Energy stocks, the worst-performing sector in the S&P 500 in 2017, fell 1.8%, with Newfield Exploration, Apache and Noble Energy among the biggest decliners.
The moves came even as oil prices rebounded from Wednesday's slump. U.S. crude for August delivery rose 0.9% to $45.52 a barrel Thursday.
Seesawing oil prices have weighed on shares of energy companies, pulling them down 15% in the S&P 500 so far this year.
Consumer-discretionary shares lost 1% in the S&P 500. Shares of Victoria's Secret parent L Brands, which reported a drop in same-store sales for June, fell $7.62, or 14%, to $46.49.
The S&P 500 health-care sector, one of 2017's biggest gainers, fell 1.3%. Shares of medical-supplies conglomerate Patterson Cos. dropped 3.28, or 6.9%, to 44.15, posting the steepest one-day percentage decline in the sector, after brokerage Stifel Nicolaus cut its rating for the stock to sell from hold.
U.S. government bonds pulled back for the sixth time in seven sessions, with the yield on the 10-year U.S. Treasury note rising to 2.369% from 2.334% Wednesday. Yields rise as bond prices fall.
A hiccup in the bond market could ripple over into stocks in the short term, but if the economy continues to strengthen, there is a good chance equities will move higher, too, said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
The Stoxx Europe 600 fell 0.7% after minutes from the European Central Bank's June meeting showed policy makers considered dropping a pledge to accelerate their massive bond-buying program.
Banks and insurance companies in Europe outperformed as they tend to benefit from higher government bond yields.
The euro rose 0.6% against the dollar to $1.1424.
Japan's Nikkei Stock Average fell 0.4% after the yen strengthened against the dollar, pressuring the export-heavy index. Hong Kong's Hang Seng Index eased 0.2% even as index heavyweight Tencent inched higher, while the Shanghai Composite Index added 0.2%.
Write to Riva Gold at riva.gold@wsj.com and Akane Otani at akane.otani@wsj.com
(END) Dow Jones Newswires
July 06, 2017 18:16 ET (22:16 GMT)