Wall Street down for second day
NEW YORK — U.S. stocks fell on Thursday, giving the Dow and the S&P 500 their worst declines in more than a month, as small-cap shares extended their retreat and Wal-Mart results disappointed.
The Russell 2000 index of small-cap stocks lost 0.7 percent, well off its session low where it hit correction territory, down more than 10 percent from its early March record close of 1,208.65. It ended down 9.3 percent from that high.
Thursday marked the second day of losses for the three major U.S. stock indexes. Volume picked up on S&P 500 e-mini futures, underscoring some views that the selling may not be over. At 2.2 million, e-mini futures volume was well above the 1.5 million daily average for the past year.
Stocks are “starting to form a little bit of a ceiling,” said Uri Landesman, president of Platinum Partners in New York,
“The small caps have really been selling off, and I think you’re continuing to see a rotation out of anything the market considers riskier.”
Wal-Mart Stores Inc. shares fell 2.4 percent to $76.83, weighing on both the Dow and the S&P 500. The world’s largest retailer forecast a second-quarter profit below analysts’ estimates. Wal-Mart reported its smallest growth in quarterly sales in nearly five years and a drop in first-quarter profit, saying that severe winter weather made it difficult for customers to visit its stores.
The Dow Jones industrial average fell 167.16 points or 1.01 percent, to end at 16,446.81. The S&P 500 lost 17.68 points or 0.94 percent, to 1,870.85. Both posted their biggest daily percentage declines in slightly more than a month.
The Nasdaq Composite dropped 31.33 points or 0.76 percent, to 4,069.29.
With the Dow and the S&P 500 near record highs, the decline in the Russell 2000 raised concern about the strength of the broader market.
The Russell 2000’s move “either is a leading market indicator or it could be a one-off ... and that’s yet to be determined,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
The CBOE volatility index rose 8.2 percent, its biggest one-day bounce in a little over a month. The spread between the spot VIX and the 3-month VIX at one point tightened to its smallest since April 15.
Adding to bearish views, billionaire hedge fund manager David Tepper sounded cautious late Wednesday, saying he was “nervous” about the stock market but that this was not the time to sell.
After the bell, shares of J.C. Penney Co Inc. jumped 19 percent to $9.96 after the U.S. department store chain reported results. Shares of Nordstrom Inc. gained 9 percent to $67, also after its results.
During the regular session, Cisco Systems Inc. jumped 6 percent to $24.18, a day after the network equipment maker posted a shallower-than-expected drop in quarterly revenue.
Economic data was mixed. U.S. industrial output fell at its fastest rate in more than 1-1/2 years in April, while initial claims for U.S. jobless benefits hit a seven-year low last week.
About 6.8 billion shares changed hands on U.S. exchanges, above the 6 billion month-to-date average, according to data from BATS Global Markets.