MARKET SNAPSHOT: U.S. Stocks Drop As Investors Fret Over Growth, Mideast Conflict

By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Middle East tensions drive up oil, gold prices

NEW YORK (MarketWatch) -- U.S. stocks moved lower on Thursday, with main indexes on track to record their fourth straight session of losses.

Concerns about slowing growth in the global economy and military strikes in Yemen (http://www.marketwatch.com/story/iran-warns-saudi-airstrikes-in-yemen-will-escalate-tension-in-region-2015-03-26) sent investors scrambling for cover, pushing up prices of perceived havens such as gold and the yen. Oil prices also jumped on fears of a potential supply disruption from the Middle East.

Ahead of the opening bell, a better-than-expected report on jobless claims did little to alleviate concerns of a marked slowdown in the economy during the first quarter.

The S&P 500 (SPX) was down 0.57% at 2,049.2, with nine of its 10 sectors trading in the red. Energy was benefiting from a jump in oil prices.

The Dow Jones Industrial Average (DJI) declined more than 100 points, down 0.62% to 17,608, with only Apple Inc. (AAPL) and International Business Machines (IBM) maintaining modest gains amid the slide.

The Nasdaq Composite (RIXF) was off by 42 points, or down 0.86% to 4,833, but losses were far smaller than a drop during the previous session, when the tech-heavy index dropped 2.4%.

Implied volatility on the S&P 500, CBOE Vix rose 7% to above 16, suggesting investors are increasingly worried that markets are facing a pullback.

Michael O'Rourke, chief market strategist at JonesTrading, believes what's happening is the market is reassessing data and starting to view previous tailwinds as headwinds.

"When one considers the trends behind the major top-down elements that investors watch -- 1. fundamentals in the form of earnings, 2. policy in the form of the Fed, and 3. economic data -- all three were previous tailwinds that appear to be transforming to headwinds as of late," O'Rourke said in a note.

The Stoxx Europe 600 index slid 1.6% ion Thursday trade. The Nikkei 225 index posted the biggest losses in two months, with a 1.4% decline.

Read: Stocks are overpriced, overleveraged, headed for trouble (http://www.marketwatch.com/story/stocks-are-overpriced-overleveraged-headed-for-trouble-2015-03-25)

Middle East tension also added to the mix. Investors drove up gold prices (GCM5), which pushed through the psychologically important level of $1,200 an ounce, while oil prices (CLM5) surged more than 2% as news of a coordinated strikes in Yemen by five Gulf states and Egypt triggered worries about crude supply. The yen (USDJPY), another perceived-safe-haven asset, also surged against the dollar.

Read: Oil prices surge as Saudi strikes in Yemen trigger supply worries (http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)

(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26) (http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26) (http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)In economic news, the number of people who applied for weekly unemployment benefits (http://www.marketwatch.com/story/jobless-claims-drop-9000-to-five-week-low-of-282000-2015-03-26)fell by more than expected, in a sign that companies are keeping their workers despite what appears to be a marked slowdown in first-quarter growth.

Stocks to watch: Shares of SanDisk Corp.(SNDK) plunged 17% after the company cut its sales outlook (http://www.marketwatch.com/story/sandisk-shares-sink-after-revenue-outlook-cut-2015-03-26).

Accenture PLC(ACN) shares jumped 5.4% after the management consulting firm beat Wall Street profit expectations. The company also offered an upbeat full-year sales outlook.

Red Hat Inc.(RHT) shares jumped 7.5% on the heels of better-than-expected results (http://www.marketwatch.com/story/red-hat-apollo-education-pvh-earnings-in-focus-2015-03-24) released on Wednesday.

For more on notable movers, read Movers & Shakers column (http://www.marketwatch.com/story/gamestop-lululemon-restoration-hardware-earnings-in-focus-2015-03-26).

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