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US STOCKS-Wall Street drops as Broadcom warning hits chip stocks


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* 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 0.14%, S&P 0.25%, Nasdaq 0.54% (Updates to early afternoon)

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 0.85% and weighedthe most on the S&P 500 .SPX and the Nasdaq .IXIC . Broadcomis a major supplier to the iPhone maker.

"This is driven by the lack of agreement with China.Everyone knows that if and when this deal gets done, there isgoing to be a positive reaction from semiconductors," said KevinMiller, chief investment officer at E-Valuator Funds inMinneapolis, Minnesota.

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 tumbling2.80%.

"People are backing off of optimism that a trade deal willget done and it'll probably drag out longer into the year," saidRyan Nauman, market strategist at Informa Financial Intelligencein Zephyr Cove, Nevada.

Earlier in the day, global stocks fell after China'sindustrial output growth in May slowed below expectations andshowed signs of weakening demand. urn:newsml:reuters.com:*:nB9N23B00Q

Technology stocks .SPLRCT fell 0.83%, the most among the11 major S&P sectors. The trade-sensitive industrials .SPLRCI slipped 0.54%, with 3M CoMMM.N weighing on the sector. Shares3M also added to pressure on the Dow .DJI .

At 13:08 p.m. ET the Dow Jones Industrial Average was down37.50 points, or 0.14%, at 26,069.27, the S&P 500 was down 7.34points, or 0.25%, at 2,884.30 and the Nasdaq Composite was down42.55 points, or 0.54%, at 7,794.58.

The S&P 500 index has so far gained 4.8% in June and was ontrack to record a second straight week of gains on hopes theFederal Reserve 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 1.70-to-1 ratioon the NYSE and a 1.94-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and two newlows, while the Nasdaq recorded 37 new highs and 64 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 ,



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