The major domestic equity indexes fell for a fourth consecutive session on Thursday, after Europe’s central bank said it would defer interest rate hikes and offered banks a new round of cheap loans, raising fresh concerns about global economic growth.

European Central Bank President Mario Draghi said: “We are (in) a period of continued weakness and pervasive uncertainty” as he announced cuts to the bank’s growth and inflation forecasts.

Stocks have stalled after a strong rally to start 2019 that was fueled by optimism over a U.S.-China trade deal and expectations the Federal Reserve will be less aggressive on interest rates. The benchmark S&P 500 index has climbed 9.7 percent this year, but it is unclear what will drive the next move higher for stocks.

The closely watched Dow Jones Transport Average fell 1.0 percent, its 10th consecutive drop for its longest streak of declines since February 2009. The transport index was dragged down by FedEx Corp shares, which fell 3.0 percent as Citigroup reduced its quarterly earnings estimates and price target for the company.

The S&P 500 closed below its 200-day moving average, a closely watched technical level, for the first time in about a month.

Consumer discretionary and financials were the worst performing major S&P 500 sectors. Utilities, a defensive group, was the lone major sector in positive territory.

Adding to the dour market tone, Kroger fell 10.0 percent after the grocer projected annual earnings below consensus estimates.

Approximately 7.8 billion shares changed hands on the major domestic equity exchanges, a number that was above the 7.4 billion share daily average over the past 20 sessions.

Day’s Economic News

The number of new applications for unemployment insurance unexpectedly fell last week, pointing to strong labor market conditions despite signs that job growth was slowing.

While other data on Thursday showed an improvement in worker productivity in the fourth quarter, the trend remained sluggish. Labor costs continued to rise at a moderate pace in the last quarter, suggesting benign inflation pressures that support the Federal Reserve’s “patient” stance towards further interest rate increases this year.

According to a report by the Labor Department released Thursday morning, initial claims fell by 3,000 claims to a seasonally adjusted 223,000 claims for the week ended March 2.

The four-week moving average, considered a better measure of labor market trends as it irons out week-to-week volatility, fell by 3,000 claims to 226,250 claims last week, the lowest level in a month.

The claims data has no bearing on February’s employment report, which is scheduled for release on Friday, as it falls outside the survey period. There are indications that employment growth is slowing after last year’s robust gains. Part of the moderation in job growth is because of a shortage of workers.

Recent Institute for Supply Management surveys showed measures of manufacturing and services sectors employment dropping in February. A report from the Fed on Wednesday indicated “modest-to-moderate gains” in employment in most of the Fed’s districts during February.

The Fed’s “Beige Book” report of anecdotal information on business activity collected from contacts nationwide showed notable worker shortages in information technology, manufacturing and construction industries as well as trucking businesses and at restaurants.

The Fed said contacts reported labor shortages were restricting employment growth in some areas. However, the pace of job growth remains more than enough to keep pushing the unemployment rate down. 

The unemployment rate is forecast to fall one-tenth of a percentage point to 3.9 percent in February.

In another report on Thursday, the Labor Department indicated non-farm productivity, which measures hourly output per worker, increased at a 1.9 percent annualized rate in the last quarter.

Meanwhile, data for the third quarter was revised down to show productivity rising at a pace of 1.8 percent instead of the previously reported 2.2 percent rate.

The economy grew at a 2.6 percent rate in the October-December period after a robust 3.4 percent growth pace in the third quarter.

The release of the full fourth-quarter productivity report was delayed by the government shutdown. The lapse in funding affected the collection and processing of economic data by the Commerce Department.

Compared to the fourth quarter of 2017, productivity increased at a rate of 1.8 percent. Productivity grew 1.3 percent in 2018, the strongest since 2010, after rising 1.1 percent in 2017.

Tepid productivity is one of the constraints to keeping the economy on a path of strong growth on a sustained basis.

Unit labor costs, the price of labor per single unit of output, rose at a 2.0 percent pace in the fourth quarter.

Unit labor costs in the July-September period grew at a 1.6 percent rate. Labor costs increased at a 1.0 percent rate compared to the fourth quarter of 2017. They increased 1.4 percent in 2018, the smallest gain since 2016, after rising 2.2 percent in 2017.

Household Wealth Falters

Household wealth fell by a record $3.8 trillion, or 3.5 percent, at the end of 2018, and corporate bond issuance plummeted as a global market rout threatened to weaken a near-decade old recovery, the Federal Reserve reported on Thursday.

In percentage terms, it was the worst quarterly blow to our domestic household finances since late 2008, when the U.S. was during a deep global recession and household net worth fell roughly 5.9 percent in one three-month span.

However, in terms of the wealth lost on a dollar basis, at least on paper, it exceeded the $3.6 trillion decline in the fourth quarter of 2008 for the biggest loss on record.

Corporate bond issuance for the year also reflected crisis-era conditions, with the worst full-year performance since 2008 as well. Overall corporate borrowing did rise as credit flowed from other sources.

Still, those results from the Fed’s quarterly Flow of Funds report shed light on the financial sector tremors that prompted Fed policymakers to put further rate hikes on hold as they assessed the damage.

Amid widespread fears about the impact of a global trade war, slowing growth, rising central bank interest rates, and other risks, Fed officials also worried that declining household wealth would translate into less spending and slower economic growth.

Those fears appear at least partially warranted as retail sales and business investment weakened at year’s end.

The report said household net worth fell from around $108 trillion to $104.3 trillion over the final months of the year, a drop that included a roughly 14 percent fall in the value of stocks and mutual funds. The value of household real estate rose slightly.

Stock prices, however, have significantly pared the losses from the fourth quarter, with the S&P index up about 9 percent this year.

Approximately $300 billion disappeared from the cash and liquid holdings of nonfinancial corporations in the fourth quarter amid the equity slump and tightening credit conditions.