U.S. stocks managed to trim early sharp losses Thursday, but geopolitical concerns in the Middle East weighed on all three major indexes, extending the losing streak to a fourth day. Saudi Arabia began airstrikes in Yemen overnight, igniting fears that tensions in the Middle East could disrupt global crude supplies.
The Dow Jones Industrial Average (INDEXDJX:.DJI), which measures the share prices of 30 large industrial companies, dropped 40.31 points, or 0.23 percent, to close at 17,678.23. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) dipped 4.90 points, or 0.24 percent, to finish at 2,056.15. The Nasdaq composite (INDEXSP:.INX) lost 13.16 points, or 0.27 percent, to end at 4,863.36.
Following Thursday's volatility, the S&P 500 joined the Dow and turned red for the year. For 2015, the Dow has lost 144 points, or 0.81 percent, and the S&P 500 index has dipped 3 points, or 0.13 percent. However, the Nasdaq composite has gained 127 points, or 2.7 percent.
Economists are looking ahead to Friday’s final revision to last quarter's U.S. gross domestic product, the broadest measure of goods and services produced across the economy. U.S. GDP was revised lower last month to an annualized 2.2 percent in the fourth quarter of last year, down from an initial estimate of 2.6 percent in January, the Commerce Department said, missing analysts’ initial estimates for 3.1 percent growth, according to analysts polled by Thomson Reuters.
Economists forecast U.S. economic growth to have expanded at a 2.4 percent seasonally adjusted annual rate last quarter compared with a 5 percent surge in the third quarter, according to Reuters' data.
The Dow Jones Industrial Average dropped more than 100 points in morning trading on geopolitical concerns in the Middle East, a day after the blue-chip index plunged nearly 300 points, erasing all gains for the year, on concerns ahead of earnings season after data revealed that U.S. businesses spent less on investments for a sixth straight month in February.
Oil prices soared Thursday to close at their highest since March 4 after Saudi Arabia began airstrikes in Yemen, raising concerns that conflicts in the Middle East could disrupt crude supplies across the world. In morning trading, West Texas Intermediate crude, the benchmark for U.S. oil prices, jumped 4.5 percent to close at $51.43 a barrel for May 15 delivery on the New York Mercantile Exchange. Brent crude, the benchmark for global oil prices, rose more than $2.74 to $59.19 a barrel, for May 15 delivery on the London ICE Futures Exchange.
The Dow transportation index (INDEXDJX:DJT), a closely watched indicator for the U.S economy as it includes airlines, trucking, marine transportation, delivery services and logistics companies, broke its 200-day moving average, driven by a more than 2 percent loss from Union Pacific Corporation. Meanwhile, airline stocks were hit hard by the Germanwings crash. The New York Stock Exchange Arca Airline Index, which tracks the performance of listed securities in the global passenger airline sector, including companies such as American Airlines Group Inc., United Continental Holdings Inc., Delta Air Lines, Inc. and Southwest Airlines Co., fell more than 1.6 percent.