The Dow fell 167.16 points, or 1%, to 16446.81, its biggest decline since April 10. The benchmark skidded 101 points on Wednesday, snapping what had been a streak of three straight record finishes.
Wal-Mart led the Dow’s drop, down 2.4%, after the discount retailer reported quarterly earnings that fell short of estimates, with U.S. sales declining for the fifth consecutive quarter. Wal-Mart’s forecast for current-quarter earnings also came in below Wall Street’s projections.
The S&P 500 lost 17.68 points, or 0.9%, to 1870.85 and the Nasdaq Composite Index gave up 31.33 points, or 0.8%, to 4069.29. Nine of the S&P 500’s 10 sectors slid, with materials and energy stocks leading the decline.
While the Dow and S&P 500 are fresh off recent all-time highs, riskier shares–especially small companies and young technology names–have been under pressure for weeks. Many traders point the finger at hedge funds and other fast-money traders that had piled into riskier stocks through the early part of this year but have suffered big losses of late. As those players have sold shares of those battered high-octane names, they have been shifting money into more-defensive stocks.
At the same time, investors have piled into bonds this year, counter to what most investors and analysts had expected.
Stocks fell after mixed readings on the economy. Initial claims for jobless benefits in the latest week dropped 24,000 to 297,000, versus expectations of 320,000. Two gauges of manufacturing activity from the New York Federal Reserve and the Philadelphia Fed topped estimates.
Asian markets were mostly lower, with Japan’s Nikkei Stock Average giving up 0.7% and China’s Shanghai Composite shedding 1.1%.
Crude-oil futures slipped 0.8% to settle at $101.50 a barrel, while gold futures eased 0.9% to $1,293.50 a troy ounce.
The dollar rose against the euro but fell versus the yen.