U.S. Stocks Dip as Tech Sector Plummets Following Salesforce Forecast

U.S. stocks fell on Thursday, driven by a significant decline in technology shares after Salesforce's disappointing forecast. The S&P 500 technology sector dropped 1.6%, becoming the biggest drag on the benchmark index. The decline was coupled with a Commerce Department report showing slower economic growth and rising weekly jobless claims.

U.S. stocks fell on Thursday, led by declines in technology shares after a disappointing Salesforce forecast, while investors digested data showing the economy had grown slower than previously expected in the first quarter. Salesforce shares plunged 21%, a day after the company forecast second-quarter profit and revenue below Street estimates due to weak client spending on its cloud and enterprise business products.

The S&P 500 technology sector dropped 1.6% and was the biggest drag on the benchmark index. A Commerce Department report showed the economy grew slower in the first quarter than previously estimated, after downward revisions to consumer and equipment spending and a key measure of inflation ticked lower, ahead of Friday's personal consumption expenditure report for April.

Another set of numbers showed weekly jobless claims rose more than expected. "Normally you'd expect the market to rally off of a downward revision to GDP because it signals the economy is moderating, the Fed's job is done, we can get rate cuts. That's not the reaction we're getting today," said Mark Hackett, chief of investment research at Nationwide.

"So I'm a little surprised but not that surprised simply because after the six week (rally) that we've had, it's pretty healthy and expected to see some consolidation or sideways move for a while." U.S. Treasury yields dipped following the report, while chances for an at least 25-basis-point interest rate reduction in September edged up to 50.4%, from 48.7% before the data, according to the CME Group's FedWatch Tool. Bond yields had hit multi-week highs earlier in the week.

The Dow Jones Industrial Average fell 271.04 points, or 0.71%, to 38,170.50, the S&P 500 lost 11.30 points, or 0.21%, to 5,255.65 and the Nasdaq Composite lost 73.04 points, or 0.43%, to 16,847.43. Among the day's gainers, HP jumped 18.4% after it posted better-than-expected second-quarter revenue.

Tesla rose 1.8% after Reuters reported the company was preparing to register its 'Full Self-Driving' software in China. Retailer Best Buy jumped 12.8% after beating forecasts for quarterly profit, while department-store chain Kohl's slumped 23.7% after cutting its annual sales and profit forecasts.

Advancing issues outnumbered decliners by a 3.15-to-1 ratio on the NYSE and by a 2-to-1 ratio on the Nasdaq. The S&P 500 posted 12 new 52-week highs and nine new lows while the Nasdaq Composite recorded 46 new highs and 76 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)