S&P 500 edges lower on chip weakness, oil boosts energy stocks
(Reuters) - The S&P 500 edged lower on Friday as chip stocks tumbled after weak forecasts from Nvidia and Applied Materials, but a recovery in oil prices for a third day lifted energy stocks.
Nvidia Corp (NVDA.O) fell 17.9 percent, leading decliners on the S&P 500, after the chip designer blamed unsold chips piling up as the cryptocurrency mining boom fizzles out.
Applied Materials Inc (AMAT.O) dropped 5.2 percent after the world’s largest supplier of equipment used to make chips, forecast quarterly results below analysts’ estimates.
The Philadelphia Semiconductor index .SOX fell 2.5 percent, resuming its downward move this year, while technology stocks .SPLRCT fell 0.6 percent, adding to a painful week that was hit by concerns about softening demand for iPhones, tighter regulation and a weakening chip sector.
“We’re seeing a downward sloping demand that is affecting the chip companies,” said Mark Grant, chief global strategist at B. Riley FBR Inc in Fort Lauderdale, Florida.
“It has something to do with the cryptocurrencies, but it has more to do with the lack of demand ... and technology is certainly the most endangered sector right now because of the very high valuations.”
Five of the 11 major S&P sectors were higher, with energy shares .SPNY rising 0.9 percent, finding support from a recovery in oil prices on hopes that OPEC and its allies would agree to cut output next month.
At 10:10 a.m. ET the Dow Jones Industrial Average .DJI was down 16.80 points, or 0.07 percent, at 25,272.47, the S&P 500 .SPX was down 5.84 points, or 0.21 percent, at 2,724.36 and the Nasdaq Composite .IXIC was down 41.17 points, or 0.57 percent, at 7,217.86.
The S&P 500 snapped a five-day losing streak on Thursday, helped by a report that said Washington would pause further tariffs on Chinese imports.
But hopes of a trade deal were dampened following a Reuters report later on Thursday that suggested a breakthrough was unlikely at talks expected between Presidents Donald Trump and Xi Jinping at the sidelines of a G20 summit in Argentina later this month.
European markets struggled again as British Prime Minister Theresa May battled to defend her much-criticized draft divorce deal with the European Union as calls grew for a vote of no confidence in her leadership.
In a gloomy week for retailers, department store operator Nordstrom Inc (JWN.N) fell 12.6 percent after quarterly same-store sales missed estimates and the company reported charges from a credit card problem.
Nordstrom was the biggest decliner on the S&P discretionary index .SPLRCD, which fell 1.1 percent.
PG&E Corp (PCG.N) jumped 38.8 percent, following steep losses in the past six days, after Bloomberg reported that a regulatory official said it did not want the utility to go into bankruptcy should it be found responsible for the deadly wildfires in northern California.
Declining issues outnumbered advancers for a 1.45-to-1 ratio on the NYSE and a 1.40-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and six new lows, while the Nasdaq recorded 12 new highs and 55 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |