MarketWatch, Chris Matthews, Mar 7, 2019 10:57am
Stocks retreated Thursday morning as investors weighed mounting evidence of a slowing global economy, after the European Central Bank slashed its gross domestic product forecasts and pledged continued monetary support for its flagging economy.
What are major indexes doing?
The Dow Jones Industrial Average DJIA, -0.73% fell 219 points, or 0.9%, to 25,453, and had been down by as many as 321 points at the session low. Meanwhile, the S&P 500 index SPX, -0.54% fell 20 points, or 0.7% to 2,751. The Nasdaq Composite Index fell 61 points, or 0.8%, to 7,444.
What's driving the market?
The ECB announced new measures to support a slowing economy Thursday, including a new 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%. Meanwhile, 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 argue over whether a deal is factored into stock prices. President Donald Trump said Wednesday that talks were moving along and "we'll see what happens.
Which stocks are in focus?
Xerox Corp. XRX, -0.94% shares could be in focus Thursday, after the print-services and document technology firm announced that it planned reorganize its corporate structure into a holding company, of which it will become a wholly owned subsidiary. The stock is down 0.5% Thursday.
Shares of Kroger Co. KR, -9.76% fell 11.9% Thursday, after the food-and-drug retailer announced fourth-quarter earnings that fell short of Wall Street expectations.
Burlington Stores Inc. BURL, -13.22% stock fell 13.2% early Thursday, after the discount retailer posted fourth-quarter earnings that beat expectations but revenue that missed.
What are the analysts saying?
Today's 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 Thursday note. "Along with possible slowing in the trend, tomorrow's payrolls reading for Feb could also be held down by payback for exaggerated strength Jan, when payrolls rose by 304,000."
How did U.S. stocks trade yesterday?
Major indexes suffered a third straight daily decline on Wednesday, with the Dow falling 133.17 points, or 0.5%, to close at 25,673.46, and the S&P 500 declining 18.20 points, or 0.7%, to 2,771.45. The Nasdaq Composite COMP, -0.50% fell 70.44 points, or 0.9%, to finish at 7,505.92.
What's on the economic calendar?
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 Thursday. The increase marks the fastest pace of growth since 2015, and rose above expectations of 1.8%, per a MarketWatch poll of economists.
Unit-labor costs rose at a 2% clip in the fourth quarter, but just 1% in the past 12 months, suggesting little likelihood of an outbreak in inflation.
Federal Reserve Gov. Lael Brainard is scheduled to deliver a speech at 12:15 p.m. in Princeton, New Jersey.
How are other markets trading?
Asian stocks closed mostly lower Thursday, with the Nikkei 225 NIK, -0.65% falling 0.7%, while Hong Kong's Hang Seng Index HSI, -0.89% lost 0.9%. The Shanghai Composite SHCOMP, +0.14% meanwhile, edged 0.1% higher on the day.
European stocks were edging lower Thursday; the Stoxx Europe 600 was down 0.1%.
The price of oil CLJ9, +0.69% looked to extend a three-day win streak, rising 0.8%. Gold GCJ9, -0.13% were edging lower, while the U.S. dollar DXY, +0.57% was rising against its peers.