NEW YORK — Wall Street is slipping Thursday, weighed down by a sharp drop for The Walt Disney Co. and flaring fears about the health of some U.S. banks.
The S&P 500 was 0.4% lower in midday trading. The Dow Jones Industrial Average was down 275 points, or 0.8%, at 33,255, as of 11 a.m. Eastern time, while the Nasdaq composite was 0.1% lower.
Disney was one of the heaviest forces dragging down the market. It dropped 8.2% after it said it lost streaming subscribers in the U.S. and Canada last quarter, surprising analysts. That was despite its earnings and revenue for the latest quarter roughly matching Wall Street’s forecasts.
Some banks beaten down by the industry’s mini-panic were also under heavy pressure again, and PacWest Bancorp dropped 22% after saying it saw 9.5% of its deposits leave last week. It said the majority of the flight occurred in two days after news reports said the bank was talking with potential investors and partners, raising worries for its customers.
Investors have been hunting for the next possible victim after high interest rates helped lead to three high-profile U.S. bank failures since March.
Also falling was Peloton Interactive, which dropped 7.8%. It's offering free seat posts for its original model bikes after recalling 2.2 million of them. The assembly can break while someone's riding it.
Helping to offer some support for the overall market was a report that showed inflation at the wholesale level was a bit cooler last month than economists expected. It followed a report from the prior day that showed inflation at the consumer level was also behaving largely as forecast.
The reports bolstered expectations on Wall Street that the Federal Reserve will hold off on hiking interest rates again at its next meeting in June. That would be the first time that’s happened in more than a year.
The Fed has been hiking rates at a furious pace to get the worst inflation in decades under control. Inflation has come down from its peak last year, but high rates have also sent prices for investments tumbling, helped caused turmoil for the banking industry and slowed the economy enough that many investors are preparing for a recession later this year.
A separate report on Thursday said more workers filed for unemployment benefits last week than expected. That’s bad news for workers and adds to concerns about a potential recession because the job market has been one of the main pillars left to prop up the economy.
But a cooling of the labor market would also contain a silver lining for the Fed, which fears that a too-hot job market could lead to upward pressure on inflation.
Following the reports, Treasury yields fell on expectations for a less aggressive Fed. Traders are betting on a high probability that the Fed will even have to cut interest rates later this year. Rate cuts act like steroids for financial markets but would likely happen only if the economy slides into recession and needs such oomph.
The Fed, meanwhile, has said it’s unsure of its next move but does not anticipate rate cuts this year if things go as expected.
The yield on the 10-year Treasury fell to 3.39% from 3.44% late Wednesday. It helps set rates for mortgages and other important loans. The two-year Treasury yield, which moves more on expectations for the Fed, fell to 3.87% from 3.91%.
On the winning side of Wall Street was Robinhood Markets, which rose 2.9% after reporting a smaller loss and better revenue for the latest quarter than expected. It also launched a way for advanced traders to make some kinds of trades 24 hours a day, five days a week.
In markets abroad, stocks in London slipped 0.4% after the Bank of England raised interest rates to their highest level since late 2008. The move was widely expected as inflation remains high in the U.K.
Stock indexes were mixed elsewhere across Europe and Asia, with most making only modest moves.