Market Wrap: Wall Street Drops on Tech; Indexes Up for Month

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Markets React To Fed Announcement On Interest Rates
Spencer Platt/Getty Images
By Caroline Valetkevitch

NEW YORK -- U.S. stocks sold off Thursday, led by a drop in the Nasdaq, as Apple shares declined and results in tech and biotech names disappointed.

Upbeat economic reports added to uncertainty about the outlook for interest rates, a day after data showed the U.S. economy slowed to a crawl in the first quarter and the Federal Reserve pointed to weakness in the labor market and other areas of the U.S. economy.

Despite the day's decline, all three major indexes posted slight gains for April.

The Nasdaq biotech index dropped 3.1 percent, led by a 4.5 percent fall in Celgene (CELG), which reported lower-than-expected quarterly revenue.

%VIRTUAL-pullquote-We didn't get a rally off of the Fed statement and that kind of set the stage for this morning.%The decline marked a fifth day of losses for the biotech index, bringing losses in the index to 8.1 percent for the week so far. The Nasdaq fell for its fourth straight session, while the S&P tech index fell 1.6 percent, the day's worst-performing sector.

Apple (AAPL) was down 2.7 percent at $125.15 and was the biggest drag on the Dow, S&P 500 and the Nasdaq. The company limited the availability of the Apple Watch after a key component was found to be defective, according to The Wall Street Journal.

"We didn't get a rally off of the Fed statement and that kind of set the stage for this morning," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"It didn't add any clarity. That kind of tied in with not a lousy earnings season but a flattish earnings season. There's just not a compelling reason to buy."

The Dow Jones industrial average (^DJI) fell 195.01 points, or 1.1 percent, to 17,840.52, the Standard & Poor's 500 index (^GSPC) lost 21.34 points, or 1 percent, to 2,085.51 and the Nasdaq composite (^IXIC) dropped 82.22 points, or 1.6 percent, to 4,941.42.

For the month, the Dow was up 0.4 percent, the S&P 500 gained 0.9 percent and the Nasdaq rose 0.8 percent.

The day's data included a report showing the number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week, which suggested the economy is picking up.

Stocks Making Moves

Among other decliners, Yelp (YELP) shares slumped 23.2 percent to $39.39 a day after the consumer review website operator forecast second-quarter revenue below analyst expectations.

Baidu (BIDU) declined 8.5 percent to $200.28 after China's dominant Internet search engine provider posted its slowest quarterly revenue growth rate in almost seven years.

S&P 500 earnings for the first quarter now are forecast to have increased 1.1 percent from a year ago, Thomson Reuters (TRI) data showed, while revenue is forecast to be down 3.2 percent.

Declining issues outnumbered advancing ones on the NYSE by 2,355 to 693; on the Nasdaq, 2,131 issues fell and 647 advanced.

The benchmark S&P 500 index posted six new 52-week highs and three new lows; the Nasdaq composite recorded 39 new highs and 91 new lows.

About 7.8 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion daily average for the month to date, according to data from BATS Global Markets.

What to watch Friday:
  • Automakers release vehicle sales for April.
  • At 10 a.m. Eastern time, the Institute for Supply Management releases its manufacturing index for April, 10 a.m. and the Commerce Department releases construction spending for March.
Earnings Calendar
These selected companies are scheduled to release quarterly financial results:
  • Aon (AON)
  • Brink's Co. (BCO)
  • Calpine (CPN)
  • Charter Communications (CHTR)
  • Chevron (CVX)
  • Clorox Co. (CLX)
  • Cooper Tire & Rubber Co. (CTB)
  • CVS Health (CVS)
  • Duke Energy (DUK)
  • FirstEnergy (FE)
  • ITT (ITT)
  • Legg Mason (LM)
  • Moody's (MCO)
  • Newell Rubbermaid (NWL)
  • United States Cellular (USM)
  • V.F. Corp. (VFC)
  • Weyerhaeuser Co. (WY)
Ultimate Cheapskate's 10 Ways to Save Money on Travel
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Market Wrap: Wall Street Drops on Tech; Indexes Up for Month
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