U.S. equities finished firmly lower Thursday as renewed trade concerns weighed on investor sentiment. Overnight, Beijing’s Ministry of Commerce said the U.S. needs to correct its “wrong actions” in order for trade negotiations to continue. The Dow fell 286 points while the S&P 500 declined 1.2%. The Nasdaq Composite retreated 1.6%.
Treasuries strengthened amid increased demand for perceived “safe haven” assets. The yield on the 10-year note tumbled six basis points to 2.31%, the lowest level since late 2017. Also notably, the yield spread between the benchmark note and three-month bill inverted amid the equity sell-off. The short-dated bill sits at 2.36%. On the data front, a preliminary update from Markit on U.S. manufacturing showed activity expanded at the slowest pace since September 2009. An additional reading revealed new home sales dropped 6.9% in April, from the prior month’s upwardly revised 8.1% gain.
The Energy sector paced the decline as WTI crude slumped 5.7%. With today’s sharp weakness, WTI crude is on pace for its worst week in more than five months. Industrials and Technology stocks also underperformed with the sectors shedding 1.6% and 1.7%, respectively. The defensive Real Estate and Utilities groups were the only sectors to finish the session in positive territory. In earnings, Best Buy slipped 4.8% to $65.82 despite topping consensus profit, revenue and same-store sales projections. Meanwhile, L Brands jumped 12.8% to $24.26 after posting a surprise first-quarter profit.
Breadth was negative on issues by 5:1 on the NYSE and by 4:1 on the NASDAQ. Composite NYSE Volume totaled more than 3.8 billion shares.