The major domestic equity indexes closed out the trading day on Tuesday in negative territory, ending a four-session rally, as a gloomy global economic growth outlook, trade concerns and disappointing company forecasts dampened sentiment.
The only positive news came from White House economic advisor Larry Kudlow who denied a report by the Financial Times that the Trump administration canceled preparatory trade talks with China. Nonetheless, the S&P 500, the Nasdaq and the Dow Jones Industrial Average all posted their largest one-day percentage declines since January 3.
On Monday, the International Monetary Fund trimmed its 2019 global economic growth estimates, and China confirmed its slowest economic growth rate in 28 years.
The downbeat news from China resulted in many so-called chip stocks heading south. The Philadelphia SE Semiconductor index fell 2.9 percent.
Each of the FAANG momentum stocks, Facebook, Apple, Amazon, Netflix and Alphabet ended the day in negative territory, closing in the red of between 1.6 percent and 4.1 percent.
Fears of a slowdown in corporate earnings mounted as companies posting fourth-quarter results provided disappointing forward-looking projections.
Johnson & Johnson fell 1.4 percent after its 2019 sales forecast fell short of analyst expectations. Shares of Stanley Black & Decker were down 15.5 percent after its 2019 forecast disappointed Street analysts.
Of the 11 major sectors of the S&P 500, only the utilities index was in the black. Industrials, energy, communications services and consumer discretionary indexes were all in the red.
With just over 12 percent of S&P 500 companies having reported thus far, 78.7 percent have exceeded expectations. Look for S&P 500 fourth-quarter earnings growth of 14.1 percent, down from 20.1 percent on Oct. 1, according to Refinitiv data.
Halliburton fell 3.1 percent as declining prices for crude oil and slowing domestic demand in the United States weighed on fourth-quarter results.
IBM rose in post-market trading after reporting a smaller-than-expected drop in fourth-quarter revenue.
During the dearth of economic data stemming from the government shutdown, a report from the National Association of Realtors indicated that sales of existing homes fell in December to the lowest level in three years. The PHLX Housing index fell 1.8 percent.
Approximately 7.97 billion shares changed hands on the major domestic equity exchanges, as compared to the 8.24 billion share average over the past 20 trading days.