Trader Jonathan Corpina works on the floor of the New York Stock Exchange, Wednesday, May 29, 2019. Stocks are getting off to a weak start on Wall Street led by drops in technology and health care companies. (AP Photo/Richard Drew)

(AP Photo/Richard Drew)

US Stocks Slide Toward First Monthly Loss of 2019

Every major index and sector fell in midday trading on Wall Street

May 29, 2019 - 1:15 pm

By DAMIAN J. TROISE AP Business Writer

NEW YORK (AP) — U.S. stocks sped toward their first monthly loss of 2019 as investors continued shifting money into the safety of bonds while fleeing high-risk holdings in the technology and industrial sectors.

Every major index and sector fell in midday trading on Wall Street Wednesday, putting the broader market on track for its fourth consecutive weekly loss. The broad slide follows a yearlong run for the S&P 500 index that culminated in an all-time high on April 30. The S&P is still up more than 10% for the year and the technology-heavy Nasdaq composite is up more than 13%.

Investors favored less-risky stocks, including utilities, amid concerns that global economic growth is being threatened by the trade war between the U.S. and China. Technology stocks continue to take some of the biggest losses. Nvidia fell 2.7%.

Abercrombie & Fitch plummeted 24.6% in heavy trading and Canada Goose, which makes luxury down coats, plunged 26.3% after both companies issued weak sales forecasts. Capri Holdings, which owns Versace and Michael Kors, sank 11.5% after its own forecast also disappointed investors.

Energy companies fell broadly following a 2.9% drop in oil prices. Banks continued declining on lower bond yields, which make loans less profitable.

Utilities held up better than the rest of the market as investors continued shifting money into lower-risk assets. Rising bond prices pushed yields lower again. The yield on the benchmark 10-year Treasury note fell to 2.22%.

Communications companies and consumer-related stocks were also among the biggest losers. Alphabet, Google's parent company, fell 2.1%, Amazon fell 1.3% and Nike lost 4%.

KEEPING SCORE: The S&P 500 index fell 0.9% as of noon Eastern Time. The Dow Jones Industrial Average fell 299 points, or 1.2%, to 24,968. The Nasdaq composite fell 0.9%.

MAY SLUMP: With two more trading days left in May, the S&P 500 is heading for a loss of 5.8%. That would be its first monthly loss since December. The market has been heading steadily lower this month as prospects for the economy dim and as traders get more worried about the lingering trade feud between Washington and Beijing. In early May the U.S. and China concluded their 11th round of trade talks with no agreement. The U.S. then more than doubled duties on $200 billion in Chinese imports, and China responded by raising its own tariffs.

SEEKING SHELTER: Rising bond prices, which pull yields lower, are typically a sign that traders feel jittery about long-term growth prospects and would rather put their money into safer holdings. The yield on the 10-year Treasury note is down 1 percentage point over the last six months, sending another strong signal that investors are concerned about weakening economic growth.

On Tuesday, the yield on the benchmark 10 year Treasury fell to its lowest level in nearly two years. It also fell below the yield on the three-month Treasury bill. When that kind of "inversion" in bond yields occurs over an extended period of time, economists fear it may signal a recession within the coming year. It has happened multiple times so far this year.

THREADBARE DUDS: Abercrombie & Fitch plunged 24.8% after the apparel maker disappointed investors with figures for a key sales measure. The company's sales at established stores fell shy of forecasts for the first quarter and it expects that measure to be flat in the second quarter, falling far short of analysts' predictions.

Abercrombie is also closing several important stores, including its Hollister flagship location in New York.

COOKED GOOSE: Luxury coat maker Canada Goose Holdings plunged 26.8% after its quarterly revenue fell shy of forecasts. The company also warned investors of slower growth ahead.

The company, known for its expensive, goose feather-stuffed parkas and jackets, expects 20% revenue growth this fiscal year. That falls short of Wall Street's forecasts.

The company has been opening up its own shops over the last several years, a change from its previous practice of selling through other retailers. In addition to giving the weak forecast, Canada Goose also said it plans on opening up more of its own stores.