US stocks ended a turbulent session of trading with big losses as sell on Wall Street went into the final hour.
Investors grappled with the downbeat gross domestic product data, less-than-expected earnings that overshadowed the bounce in crude oil.
The slower-than-expected growth led to flight quality and investors flocking into havens like gold while unloading equities.
According to Market Watch, the S&P 500 closed down 1.3% or 26.26 points at 1,994.99. The benchmark index dropped 2.8% the last week and closed the month with a 3.1% loss. The energy sector alone closed the day with gains, while there was a slump in nine other sectors.
The Dow Jones Industrial Average dropped 1.5% or 251.90 points to 17,164.95. The blue-chip index dropped 2.9% over the last week and declined 3.7% the past month.
The Nasdaq Composite Index closed the day 1% lower or 48.17 points at 4,635.24. The tech-heavy index lost 2.6% over the weekend and closed the month lower by 2.1%.
Reuters quoted Peter Coleman, head trader at ConvergEx Group as having said, “It feels like a flight-to-safety trade on a month-end. People are putting money into assets that have done well this month.”
Phil Orlando, chief equity strategist at Federated Investors said, “The headline number was very disappointing, so investors are buying bonds and selling stocks because they think the economy is decelerating. However, this number is likely to be revised upwards.”
Orlando added, “Despite what the Fed said in their statement on Wednesday, if such sub-trend growth persists, the Fed will not tighten in June.”
Consumer spending was bright with data showing US consumer sentiment climbed in January to the highest level in 11 years on better wage and job prospects.
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