Wall Street closed lower after a rocky session on Wednesday as gains in consumer staples and healthcare were offset by a sharp drop in Amazon shares and a continuing slide in technology stocks. All three major US indexes ended the day in negative territory following Tuesday's late-session tech-driven sell-off following Monday's rally as traders moved to defensive stocks after recent weeks' heightened volatility.
"People should expect what's happening given the kind of volatility we've seen as well as the fact that we're kind of in a news vacuum prior to quarterly earnings," Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana, said. "It's a market that's really looking for the next leadership." The Dow Jones Industrial Average fell 9.29 points, or 0.04 percent, to 23,848.42, the S&P 500 lost 7.62 points, or 0.29 percent, to 2,605 and the Nasdaq Composite dropped 59.58 points, or 0.85 percent, to 6,949.23.
Online retailer Amazon.com was down as much as 6.7 percent, losing more than $53 billion in market value after a report that President Donald Trump indicated he wanted to rein in the company. The stock later pared its loses to end the day down 4.4 percent. Shares of automaker Tesla slumped 7.7 percent, extending recent losses, following a credit downgrade and news that officials are investigating a fatal crash and fire in California.
Countering those losses were gains for consumer staples, real estate, telecom, and healthcare. The S&P Energy index posted the biggest loss of the 11 major S&P sectors, ending 1.99 percent lower as crude prices fell after data showed a surprise build in US stocks. The markets shrugged off a report from the US Commerce Department that the US economy slowed less than previously reported in the fourth quarter as consumer spending grew at its fastest quarterly pace in three years. GDP expanded at a 2.9 percent annual rate in the last three months of 2017, ahead of the previously reported 2.5 percent.
Strong economic data could invite a more hawkish approach by the US Federal Reserve this year with respect to further interest rate hikes. "I'm not surprised by the economic data," said Carlson. "But the market right now is looking past that from a valuation standpoint." Stocks had jumped earlier in the week as trade war fears ebbed following comments from officials in the United States and China that implied the world's two largest economies would renegotiate tariffs and trade imbalances.
China is expected to announce a list of tariffs on US imports in retaliation against the expected tariff proposals from the US on Chinese goods. Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favoured decliners. Volume on US exchanges was 6.96 billion shares, compared to the 7.36 billion average for the full session over the last 20 trading days.
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