You are here

Stocks have biggest drop since August

Hefty losses in health care and technology companies led U.S. stocks sharply lower Tuesday, handing the market its biggest pullback since August and its worst two-day drop since May. 

The broad slide, which briefly sent the Dow Jones industrial average down by more than 400 points, erased some of the big gains the market had racked up since the beginning of the year, though the market was still on track to close out January with a gain.

Banks, industrial companies and energy stocks also accounted for a big slice of the market's losses. Bond prices fell, sending yields to their highest level since April 2014.

"This was a market that was overbought and it was vulnerable to something pulling it back," said Quincy Krosby, chief market strategist at Prudential Financial. "That said, we're in the heaviest part of earnings season this week and we expect to see the majority of the reports coming out to be positive. That could be the catalyst to have buyers come in."

The Standard & Poor's 500 index fell 31.10 points, or 1.1 percent, to 2,822.43. That's the biggest one-day drop since August 17. The Dow had its biggest decline since May, losing 362.59 points, or 1.4 percent, to 26,076.89. The average had been down more than 411 points. 

The Nasdaq slumped 64.02 points, or 0.9 percent, to 7,402.48. The Russell 2000 index of smaller-company stocks gave up 15.29 points, or 1 percent, to 1,582.82. The market's last two-day losing streak was in late December. 

Health care companies were by far the biggest losers on Tuesday. The sector finished with a loss of 2.1 percent. It's still up 8.1 percent this year.

Insurers, drugmakers and distributors slumped following news that Amazon was teaming up with JPMorgan Chase and Berkshire Hathaway to create a company that helps their U.S. employees find quality care at a reasonable cost. The venture, whose initial focus would be on developing technology, is in its early planning stage. 

Express Scripts slid $2.61, or 3.2 percent, to $79.31. Cigna tumbled $16.01, or 7.2 percent, to $207.89. UnitedHealth Group lost $10.76, or 4.3 percent, to $236.65. Anthem fell $13.58, or 5.3 percent, to $243.44.

HCA bucked the trend after the hospital chain posted better fourth-quarter results than analysts had expected. The stock gained $3.83, or 3.9 percent, to $101.45.

The news gave Amazon shares a lift. The stock added $20.14, or 1.4 percent, to $1,437.82.

Technology stocks fell almost as much as health care shares. Corning lost $1.92, or 5.6 percent, to $32.33.

The Lawton Constitution

102 SW 3rd, Lawton, OK
Classifieds: (580) 357-9545
Circulation: (580) 353-6397
Switchboard: (580) 353-0620