US Markets

Wall Street dips as tech stocks lag; trade hopes cushion fall


A fall in technology stocks pulled Wall Street's main indexes lower on Tuesday as weak economic data from China revived global recession fears, but losses were tempered by hopes of a trade deal.

By Uday Sampath Kumar

Sept 10 (Reuters) - A fall in technology stocks pulled Wall Street's main indexes lower on Tuesday as weak economic data from China revived global recession fears, but losses were tempered by hopes of a trade deal.

China's factory-gate prices shrank 0.8% in August, the sharpest pace of decline in three years, as businesses slashed prices to cope with flagging demand amid a bruising trade war with the United States that has slowed growth in the world's second largest economy.

"A slowdown in China is clearly a sign that global deceleration of economic activity is real and is something we're going to have to deal with," said Omar Aguilar, chief investment officer of equities and multi-asset strategies at Charles Schwab Investment Management.

Offering some respite, a report from the South China Morning Post said Beijing is expected to agree to buy more agricultural products in hopes of a better trade deal with the United States.

Analysts attributed some of the selloff in tech to investors re-distributing funds into stocks that have underperformed during the year.

Tech stocks .SPLRCT, the best performer on the S&P 500 with a 29% surge this year, fell 0.84%, while the energy sector .SPNY, the year's worst performer, jumped 1.59%.

Real estate .SPLRCR fell 1.48%, the most among the 11 major S&P sectors. The sector is the second best performer of the year, gaining 25%.

"It's less about risk and more about returns - taking profits and reallocating to the losers," Aguilar said.

Trading so far this week has largely been subdued as investors are holding out for policy decisions from central banks on potential monetary easing. The European Central Bank will hold its policy meeting on Thursday.

The U.S. Federal Reserve and the ECB are widely expected to cut interest rates over the next two weeks, but investors doubt the extent to which central banks' measures will stem an economic slowdown.

At 13:05 p.m. ET the Dow Jones Industrial Average .DJI was down 7.18 points, or 0.03 percent, at 26,828.33, the S&P 500 .SPX was down 6.69 points, or 0.22 percent, at 2,971.74 and the Nasdaq Composite .IXIC was down 21.87 points, or 0.27 percent, at 8,065.57.

Among other stocks, Boeing Co BA.N rose 1.92% even as it reported a 72% fall in plane deliveries in August.

Apple Inc AAPL.O kicked off its presentation where it is expected to announce pricing for its forthcoming streaming TV service as well as updates to its iPhone lineup. Shares of the company edged 0.06% higher.

Details on its new video streaming service could also move shares of Netflix Inc NFLX.O and Walt Disney Co DIS.N. Netflix was down 0.92%.

Ford Motor Co F.N fell 2.88% after ratings agency Moody's downgraded its bonds to junk status overnight.

Chipotle Mexican Grill Inc CMG.N slipped 5.23% following Wendy's Co's WEN.O announcement that it will expand its breakfast offerings as well as a lawsuit from New York Mayor Bill de Blasio's office accusing it of violating the city labor law.

Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.73-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and two new lows, while the Nasdaq recorded 33 new highs and 35 new lows.

(Reporting by Uday Sampath in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)

((; within U.S.+1 646 223 8780; Twitter: @sampath_uday; Reuters Messaging:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest US Markets Videos

    #TradeTalks: How Investors Start to Position Themselves in front of the Election

    WealthWise Financial CEO Loreen Gilbert joins Jill Malandrino on Nasdaq #TradeTalks to discuss what she is watching in the markets as investors start to position themselves in front of the election.

    Sep 10, 2020


    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at and via Reuters TV.

    Learn More