Major U.S. stock indexes on course for a third straight day of declines
-- Shares of Macy's, Kohl's slide after quarterly earnings reports
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-- Havens like Treasurys, gold extend gains
Financial markets tumbled for a third straight day, as disappointing earnings and an exchange of threats between North Korea and the U.S. pushed investors out of stocks.
The declines have jolted markets from a period of calm, when stock indexes around the world climbed to records and volatility remained historically low. U.S. stocks have rallied this year with few interruptions, something many investors have attributed to the improving health of U.S. companies and steady global economic growth.
However, rising geopolitical tensions, a batch of tepid earnings reports and economic data showing sluggish inflation and productivity growth have raised the prospect of a more prolonged pullback.
Thursday's moves sent the Dow Jones Industrial Average down 139 points, or 0.6%, to 21909. The CBOE Volatility Index, a measure of investors' expectations for swings in the S&P 500, soared 35% -- on track for its second-biggest one-day jump of the year. The VIX has hovered near record lows this year.
After a largely steady rally that led the Dow industrials to nine straight records through Monday, many investors and analysts have cautioned that a selloff was simply overdue.
"You have these periods of large runs, and that's often followed up by pullbacks; and that's what we're seeing," said William Hamlyn, senior investment analyst at Manulife Asset Management.
Others said it was too early to conclude the week's moves marked the beginning of a deeper downturn.
Even after their recent losses, U.S. stocks remain near their all-time highs. The S&P 500 fell 1% Thursday but is still up around 9% so far this year.
"It's hard to consider a lot of 'what-ifs' before they happen," said Frank Cappelleri, executive director of brokerage Instinet. "The way the S&P has reacted, it doesn't seem like people are pricing in nuclear war."
Strong earnings this season have helped bolster global markets, and the economy should grow in the second half of the year, said William Delwiche, managing director and investment strategist at Baird.
"We have the international economy doing quite well and some evidence that the U.S. economy can get back in gear and accelerate a little bit," he said.
Investors retreated from several of this year's winners on Thursday, including shares of large U.S. technology companies and biotechnology firms.
The Nasdaq Composite, which includes many such companies, fell 1.6%.
A series of downbeat corporate reports also weighed on U.S. stocks.
Retailers slid after department stores Macy's and Kohl's both said same-store sales continued to decline in the second quarter. Shares of Macy's lost nearly 10% and Kohl's fell 6.9%.
Shares of Blue Apron Holdings fell 17% after it said it lost more money than analysts had expected in its first quarterly earnings report since going public in June.
Chip maker Nvidia, which is expected to report earnings after the close, fell around 3% and was one of the biggest decliners in the S&P 500 tech sector.
As investors sold stocks around the world, assets perceived as havens -- such as gold, the Japanese yen and U.S. government bonds -- strengthened.
The yield on the 10-year U.S. Treasury note fell to 2.211%, according to Tradeweb, from 2.246% on Wednesday as prices rose. Gold jumped 0.9% to $1,291.10 a troy ounce, while the Japanese yen strengthened 0.7% against the dollar.
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(END) Dow Jones Newswires
August 10, 2017 14:20 ET (18:20 GMT)