U.S. stocks are skidding Thursday morning as the market continues a sell-off that began late the previous day. Big losses for insurer AIG are hurting financial stocks while Cardinal Health tumbles and takes the health care sector lower. Tesla is skidding after the electric car maker posted another big loss, and Wall Street reacted negatively to comments by CEO Elon Musk.
KEEPING SCORE: The S&P 500 index dropped 32 points, or 1.2 percent, to 2,603 as of 10:35 a.m. Eastern time. The Dow Jones industrial average fell 309 points, or 1.3 percent, to 23,615. The Nasdaq composite dropped 77 points, or 1.1 percent, to 7,023. The Russell 2000 index of smaller-company stocks slid 19 points, or 1.2 percent, to 1,535.
After a mostly flat day of trading, stocks slumped late Wednesday after the Federal Reserve left interest rates unchanged. The Fed expects to keep raising interest rates to keep inflation under control, and investors appeared to get more concerned about the possibility that rising rates will slow the economy down.
QUEASY RESULTS: American International Group dropped 8.8 percent to $49.99 after its first-quarter profit fell short of analysts’ estimates. Cardinal Health, which distributes prescription drugs, also had a smaller-than-expected profit and slashed its forecast for the rest of the year.
Cardinal said its Cordis cardiovascular products business ran into supply chain problems and also paid a higher expected tax rate. The stock gave up 17.9 percent to $53.06. Adding to the woes for health care companies, medical device maker Hologic dropped 9.8 percent to $35.74 after it wrote down the value of its Cynosure business by about $732 million. It bought Cynosure for $1.57 billion a year ago.
Health care information technology company Cerner reported weak revenue and gave a disappointing quarterly forecast. It fell 7.8 percent to $53.42.
HITTING THE SKIDS: Tesla tumbled 6.6 percent to $281.86 after the electric car maker said it lost $745 million in the first quarter as it is still struggling to produce more of its lower-cost Model 3 sedan. The company has $9.5 billion in long-term debt and some experts are wondering if Tesla will be able to pay all of its bills because of the repeated losses. The company said it plans to defer some spending.
Musk appeared to make matters worse on the company’s conference call, as he was testy with analysts at times and dismissed some questions as “boring” and “not cool.” JPMorgan Chase analyst Ryan Brinkman said the call was “truly bizarre.”
BONDS: Bond prices climbed. The yield on the 10-year Treasury note fell to 2.93 percent from 2.97 percent.
OTHER LOSERS: Industrial and technology companies also fell. Facebook lost 1.7 percent to $173.09 and Intel gave up 1.7 percent to $51.42. Heavy machinery maker Caterpillar sank 3.6 percent to $138.75 and Honeywell lost 2.3 percent to $139.68. Among retailers, Amazon fell 1 percent to $1,553.78 and Home Depot shed 2.3 percent to $181.67.
EAT UP: Kraft Heinz posted a bigger profit than analysts expected despite weaker sales, and the Oreo maker’s stock gained 3.3 percent to $55.97. Cereal and Pop Tart maker Kellogg rose 2.3 percent to $57.96 after its profit and sales topped analyst projections.
LOSING THE BEAT: Spotify sank after reporting quarterly results for the first time since becoming a publicly traded company in early April. The music streaming service had 75 million subscribers at the end of March, but investors may been hoping for stronger growth, as Spotify said it expects to have 79 million to 83 million subscribers by the end of June. Spotify fell 9.4 percent to $154, giving up most of the gains it’s made since its debut.
ENERGY: Benchmark U.S. crude fell 0.9 percent to $67.35 barrel in New York while Brent crude, the international standard, lost 1.1 percent to $72.55 per barrel in London.
CURRENCIES: The dollar fell to 109.25 yen from 109.73 yen. The euro sipped to $1.1965 from $1.1988.
OVERSEAS: France’s CAC 40 shed 0.3 percent while Germany’s DAX fell 0.5 percent. The British FTSE 100 dipped 0.4 percent. Hong Kong’s benchmark Hang Seng index dropped 1.2 percent and South Korea’s Kospi dipped 0.7 percent. Japanese markets were closed for a holiday.
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