Wall St. breaks run of gains as economic data disappoints

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Weak economic reports pressured U.S. stocks on Thursday after the market's recent run of gains, and a drop in healthcare shares added to the bearish momentum.

The Commerce Department said new orders for key U.S.-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth.

Separate data showed the Philadelphia Federal Reserve's gauge of U.S. Mid-Atlantic business activity declined in February to its weakest level since May 2016, while another report showed U.S. existing home sales dropped last month to the lowest level since November 2015.

"We've had a tremendous run in the market, and we had weak data that allowed investors to take some profits," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

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Still, he said, "I was a little surprised by some of the weakness in the data. Some of it is weather related and some trade related, so it's hard to get a good feel for how it would be," without those factors.

Recent gains in the market have been driven by hopes of progress in China-U.S. trade talks and dovish signals from the Federal Reserve. Despite the day's losses, the S&P 500 hovers near two-month highs and is up about 18 percent since its late-December low.

The Dow Jones Industrial Average fell 103.81 points, or 0.4 percent, to 25,850.63, the S&P 500 lost 9.82 points, or 0.35 percent, to 2,774.88 and the Nasdaq Composite dropped 29.36 points, or 0.39 percent, to 7,459.71.

The S&P 500 snapped a three-day streak of gains.

A sharp slowdown in global growth, along with fading fiscal stimulus and trade tensions has fueled recent worries about the economy.

The S&P healthcare index slid 0.9 percent, weighed down by Johnson & Johnson's 0.7 percent fall. The healthcare giant said it received subpoenas from U.S. regulators related to litigation involving alleged asbestos contamination in its signature baby powder product line.

Adding to the day's weakness, the S&P 500 energy index fell 1.6 percent.

Source(s): Reuters