U.S. stocks declined, with the Standard & Poor’s 500 Index reaching a four-week low, as a slide in oil and metals weighed on commodities producers and Greece asked for a deferral on its debt payments.
Freeport-McMoRan Inc., DuPont Co. and fertilizer maker Mosaic Co. lost at least 1.7 percent. Chesapeake Energy Corp. dropped 3.8 percent to lead the energy group lower. Verizon Communications Inc. slid 2 percent after an analyst downgrade. Apparel maker L Brands Inc. added 1.2 percent as May sales exceeded estimates. Wynn Resorts Ltd. jumped 7.2 percent on signs of improvement in Macau’s gambling economy.
The S&P 500 lost 0.9 percent to 2,095.84 at 4 p.m. in New York. The index fell below its average price during the past 50 days, though it’s still within 1.7 percent of its all-time high. The Dow Jones Industrial Average declined 170.69 points, or 0.9 percent, to 17,905.58. The Nasdaq Composite Index retreated 0.8 percent. About 6.3 billion shares traded hands on U.S. exchanges, 2.3 percent below the three-month average.
“We’ve hit a point where we have conflicting sentiment, and that’s why we’re sitting here and grinding sideways,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “Stock investors are taking an eyebrow-raised look at the bond market, wondering if they’re missing anything. Plus you always have the Greece situation always lurking around in the background.”
The S&P 500 has alternated between gains and losses in the past four sessions as it churns in the tightest trading range at this time of year since 2006. The index hasn’t had a 10 percent decline since October 2011, the longest stretch without a drop of that magnitude since a 55-month period ending in October 2007.
Greece today became the first country to defer a payment to the International Monetary Fund since the 1980s as its game of brinkmanship with creditors goes down to the wire. With Prime Minister Alexis Tsipras getting ready to address parliament on Friday after receiving a list of creditors’ demands, the step underscores the state of the country’s shriveling finances.
Global bond markets recovered from an earlier selloff, which took the yield on the 10-Year U.S. Treasury to its highest level since October. European Central Bank chief Mario Draghi said yesterday markets should get used to greater volatility while forecasting faster euro-area inflation rates.
Investors are closely watching economic data for clues on timing of a potential interest rate rise from the Federal Reserve. Fed Bank of St. Louis President James Bullard said Wednesday “markets have appropriately moved back the likely date of policy firming,” amid recent weaker-than-forecast data.
The IMF said today the Fed should hold off from raising interest rates until the first half of 2016, as the fund cut its U.S. growth forecast for the second time in three months.
A report today showed jobless claims decreased by 8,000 in the latest week, while the total number of people receiving unemployment insurance payments was the smallest in more than 14 years, signaling the job market remains firm.
The government’s monthly employment data are due Friday, and economists predict the economy added 225,000 jobs in May, compared with April’s 223,000, with the unemployment rate remaining at 5.4 percent.
The Chicago Board Options Exchange Volatility Index jumped 7.7 percent Thursday to 14.71, its highest since May 7. The gauge, known as the VIX, last month had its steepest drop since February.
All of the S&P 500’s 10 main groups slumped Thursday, with raw-material and energy shares dropping the most after the IMF cut its U.S. growth forecast. The materials group hit a six-week low. Chemical maker LyondellBasell Industries NV lost 3.2 percent, its biggest slide since March. Monsanto Co. fell 1.9 percent to its lowest in more than two months.
Capital goods producers Precision Castparts Corp. and Illinois Tool Works Inc. declined at least 1.7 percent. Boeing Co. and Textron Inc. retreated 1.8 percent.
Exxon Mobil Corp. slid 0.9 percent near a two-month low as West Texas Intermediate crude fell 2.8 percent. Chesapeake Energy, Transocean Ltd. and Diamond Offshore Drilling Inc. all sank more than 1.8 percent, with energy companies in the S&P 500 dropping for the eighth time in nine sessions.
Banks in the benchmark index fell for first time in four days as Treasury yields slipped from their highest level in almost eight months. Wells Fargo & Co. retreated 1.4 percent after closing Wednesday at an all-time high, while Bank of America Corp. lost 0.9 percent.
Transportation companies reversed Wednesday’s gains, with airlines pacing the decline. JetBlue Airways Corp., American Airlines Group Inc. and United Continental Holdings Inc. fell at least 1.6 percent. The Dow Jones Transportation Average decreased 0.9 percent after rallying 1.2 percent Thursday.
Verizon dropped 2 percent, the most since December, to a nearly three-month low after JPMorgan Chase & Co. downgraded the shares to neutral from overweight.
T-Mobile US Inc. gained 2.6 percent to a seven-year high after a report that the fourth-largest U.S. wireless company is in talks to merge with Dish Network Corp. Dish jumped 4.9 percent, the most since November.