With a 2% Thud, Stocks End Worst Month Since January, Dow Negative in 2014

Well, that wasn’t pleasant. The Dow Jones Industrial Average just closed out July with a loss of 317 points, or 1.9%. It was the Dow’s biggest single-day selloff since February. In the process, the blue-chip index breaks a five-month winning streak and is now down 13.4 points this year on a price basis.

Why a big selloff, and why today? The answer is, no reason in particular. No single factor on its own. You’ve got trouble in Argentina and …. Well, the rest is a bit murky. The economic data lately is strong. Perhaps that can be read as a negative by monetary-policy worrywarts. Stronger data certainly could give investors pause over the pace of Federal Reserve policy changes.

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But that’s not “news.” In the news were so-so earnings reports which didn’t have a ton of read-though for the rest of the economy. Exxon Mobil (XOM) shed 4.2% as output declined. Whole Foods Market (WFM) lost 2.3% after another warning on sales this year (the struggles of the retail sector, particularly high-end grocers, are nothing new). Akamai Technologies (AKAM) slid 2.8% after undershooting Wall Street’s expectations.

High flyers which ran into turbulence early in the year were also sharp decliners in Thursday’s session. SPDR S&P Biotech ETF (XBI), for instance, shed 3.2%.

Maybe it’s just time for a selloff, a consolidation, a correction, whatever you choose to call it. Here’s what Dow Jones Newswires had to say on the subject this afternoon:

Traders said there was no single catalyst for the selling, which came on the heels of broad losses in European shares.

U.S. traders pointed to a string of disappointing earnings reports Thursday, which disrupted what has been strong season for corporate profits. An upbeat reading from the labor market, meanwhile, sowed some concerns about the Federal Reserve moving quicker than had been expected to pull back on its easy money policies.  …

"People are taking profits and they are a little nervous," said Ian Winer, director of equity trading at Wedbush Securities. …

Recent stock gains, mixed economic signals and concerns about Fed policy changes makes it difficult to have high conviction in the stocks, said Nico Marais, head of multi-asset investments and portfolio solutions at Schroder Investment Management.

Mr. Marais said that he has been trimming some stock positions and raising cash in recent weeks.

“We’ve been through a period of relative calm in the markets and not seen a selloff for some time,” he said. “There’s a sense of complacency–This is not the time to be adventurous in the markets.”