Quantcast

US STOCKS-Wall St drops as Broadcom warning pushes chip stocks lower


Shutterstock photo


(For a live blog on the U.S. stock market, click LIVE/ ortype LIVE/ in a news window.)

* Broadcom slides after warning of chip demand slowdown

* Tech down most among 11 major S&P sectors; Chips tumble

* Data shows U.S. retail sales rise in May

* Indexes down: Dow 0.16%, S&P 0.24%, Nasdaq 0.53% (Updates prices, comments)

By Shreyashi Sanyal

June 14 (Reuters) - U.S. stocks dropped on Friday, as sharesof chipmakers sank on a warning from sector major Broadcom of abroad weakening in global demand and Chinese data pointed to theworst slowdown in industrial growth in 17 years.

Shares of Broadcom IncAVGO.O fell 6.53% after it cut itsfull-year revenue forecast by $2 billion, blaming the U.S.-Chinatrade conflict and export curbs on Huawei Technologies Co LtdHWT.UL . urn:newsml:reuters.com:*:nL4N23K49T

Shares of Apple IncAAPL.O also slipped 1% and weighed themost on the three main indexes. Broadcom is a major supplier tothe iPhone maker.

"Until there's a resolution or some type of clarity on thetrade deal with China, you're going to see the chipmakers showweakness," said Ryan Nauman, market strategist at InformaFinancial Intelligence in Zephyr Cove, Nevada.

Losses in chip companies, who both source product and sellheavily in China, dragged the benchmark S&P 500 index .SPX lower, with the Philadelphia Semiconductor index .SOX tumbling2.67%.

"People are backing off of optimism that a trade deal willget done and it'll probably drag out longer into the year,"Nauman said.

China's industrial output growth in May slowed belowexpectations and showed signs of weakening demand, sending achill through stock market investors globally. urn:newsml:reuters.com:*:nB9N23B00Q

Technology stocks .SPLRCT fell 0.8%, the most among the 11major S&P sectors. The trade-sensitive industrials .SPLRCI slipped 0.61%.

At 11:27 a.m. ET the Dow Jones Industrial Average .DJI wasdown 41.61 points, or 0.16%, at 26,065.16, the S&P 500 .SPX was down 7.07 points, or 0.24%, at 2,884.57 and the NasdaqComposite .IXIC was down 41.69 points, or 0.53%, at 7,795.44.

The S&P 500 index has gained 4.8% in June so far and was ontrack to end the week slightly higher, on hopes the FederalReserve will soon cut interest rates.

A Fed meeting next week may provide the acid test of marketexpectations that the U.S. central bank could cut rates as muchas three times this year, while a G20 summit at the end of themonth may yet yield more progress on a trade deal.

In a bright spot, data showed U.S. retail sales increased inMay and sales for the prior month were revised higher,suggesting a pick-up in consumer spending that could ease fearsthe economy was slowing down sharply in the second quarter. urn:newsml:reuters.com:*:nLNSEHEF5I

Online pet products retailer Chewy IncCHWY.N rose 63% inits market debut on Monday, at a valuation of over $14 billionand joined a host of high-profile companies, such as Lyft IncLYFT.O and Uber Technologies IncUBER.N that listed on U.S.stock exchanges this year. urn:newsml:reuters.com:*:nL4N23L3II

Declining issues outnumbered advancers for a 1.74-to-1 ratioon the NYSE and a 1.96-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and two newlows, while the Nasdaq recorded 31 new highs and 50 new lows. (Reporting by Shreyashi Sanyal and Aparajita Saxena inBengaluru; Editing by Patrick Graham and Arun Koyyur) ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;Reuters Messaging:Shreyashi.Sanyal.thomsonreuters.com@reuters.net))






This article appears in: World Markets , US Markets , Stocks
Referenced Symbols: AAPL ,



More from Reuters

Subscribe







See Reuters News













Research Brokers before you trade

Want to trade FX?