Stocks finished lower for a fourth straight session Thursday on mounting evidence of a slowing global economy after the European Central Bank slashed its gross domestic product forecasts and pledged continued support for the flagging eurozone economy.
How did major indexes fare?
The Dow Jones Industrial Average DJIA, -0.78% fell 200.23 points, or 0.8%, to 25,473.23. The S&P 500 index SPX, -0.81% dropped 22.52 points, or 0.8%, to 2,748.93, and the Nasdaq Composite Index shed 84.46 points, or 1.1%, to 7,421.46.
What drove the market?
The ECB announced new measures to support a slowing economy, including a round of long-term loans to European financial institutions, while issuing a surprise pledge to hold off on any interest-rate increases until at least the end of the year.
The announcement follows updated growth projections from the central bank, with the ECB forecasting growth of just 1.1% in 2019, down from a previous estimate of 1.7%. Analysts and economists, however, questioned whether the moves will be enough to staunch the slowdown of the eurozone economy.
U.S.-China trade talks also remain in focus for investors, though analysts debated whether a deal is already factored into stock prices. President Donald Trump said Wednesday that talks were moving along and “we’ll see what happens.”
First-time unemployment claims fell to 223,000 in the week ended March 2, from 226,000 the previous seven days, and below the 225,000 expected by economists polled by MarketWatch.
The productivity of the U.S. workforce rose at an annual pace of 1.9% in the fourth quarter of 2018, the Labor Department reported. The increase marks the fastest pace of growth since 2015, and rose above expectations of 1.8%, per a MarketWatch poll of economists.
Fed Gov. Lael Brainard said the U.S. should follow a “softer path” for its benchmark federal-funds rate given that the economic outlook has weakened. “Prudence counsels a period of watchful waiting,” Brainard said in a speech at Princeton University.
What were analysts saying?
The ECB announcement is a “reaffirmation that the European economy continues to slog along,” Andrew Slimmon, lead senior portfolio manager at Morgan Stanley Investment Management, told MarketWatch.
U.S. markets are reacting to “the anxiety of the global slowdown,” he added. “It’s an excuse to sell, given the market has made a strong move upward this year, and it is short-term vulnerable to any type of bad news.”
“Through the volatility, the trend in [jobless] claims appears to have risen a bit, consistent with at least some slowing in the trend in payrolls gains from last year’s 223K per month average,” wrote Jim O’Sullivan, chief U.S. economist at High Frequency Economics, in a note. “Along with possible slowing in the trend, tomorrow’s payrolls reading for Feb could also be held down by payback for exaggerated strength in January, when payrolls rose by 304,000.”
Which stocks were in focus?
Xerox Corp. XRX, -1.98% shares dropped 2% after the print-services and document technology company announced that it planned to reorganize its corporate structure into a holding company, of which it will become a wholly owned subsidiary.
Shares of Kroger Co. KR, -9.95% sank 10% after the food-and-drug retailer announced fourth-quarter earnings that fell short of Wall Street expectations.
Burlington Stores Inc. BURL, -11.90% shares tumbled 12% after the discount retailer posted fourth-quarter earnings that beat expectations but missed on revenue.
Shares of Walgreens Boots Alliance Inc. WBA, -2.14% fell 2.1% on concerns over potential increased regulatory pressures after the Food and Drug Administration called the company the top violator among pharmacies illegally selling tobacco products to minors.
Mosaic Co. MOS, -4.48% shares shed 4.5% after the fertilizer company said it would cut its phosphate production by 300,000 tons for the spring season due to continued weather concerns and higher-than-normal carry-over inventory levels.
How did other markets trade?
Asian stocks closed mostly lower, with the Nikkei 225 NIK, -2.01% falling 0.7%, while Hong Kong’s Hang Seng Index HSI, -1.90% lost 0.9% and the Shanghai Composite SHCOMP, -4.40% edged up 0.1%.
European stocks retreated, with the Stoxx Europe 600 down 0.4%.
Oil CLJ9, -1.01% extended gains and gold prices GCJ9, +0.63% settled lower. The U.S. dollar DXY, -0.16% rallied against its peers.