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Activision Blizzard falls 14.3 per cent, Skyworks Solutions down 6.5 per cent

The news gave investors a reason to keep away from riskier assets, with worries about rising interest rates and effects of the U.S.-China trade war taking the shine off a decade-long bull run for U.S. stocks this year.


Devdiscourse News Desk Last Updated at 09-11-2018 19:48:16 IST
Activision Blizzard falls 14.3 per cent, Skyworks Solutions down 6.5 per cent
  • Prices paid by producers rose 0.6 per cent, while analysts polled by Reuters had expected producer prices to rise 0.2 per cent from September. (Image Credit: Twitter)

U.S. stocks were set to fall at the open on Friday, as a batch of weak Chinese data raised concerns about global growth a day after the Federal Reserve hinted at the gradual tightening of borrowing costs.

The news gave investors a reason to keep away from riskier assets, with worries about rising interest rates and effects of the U.S.-China trade war taking the shine off a decade-long bull run for U.S. stocks this year.

U.S. crude price entered "bear market" territory, falling more than 20 per cent since early October and below $60 a barrel, potentially adding more pressure on the S&P energy index, which was down about 4.9 per cent this year.

Oil majors Exxon Mobil Corp and Chevron Corp were down more than half a per cent in premarket trading, while the price of copper, considered an economic bellwether, drove 2.8 per cent loss in miner Freeport McMoran Inc.

"A lot of investors look at oil prices as the general indicator of the global economy, so it being weak is not a good sign," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Amid a bitter trade dispute between the Washington and Beijing, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity.

The China report sent Asian stocks into a tailspin, while trade-sensitive stocks such as Boeing Co and Caterpillar Inc fell more than 1 per cent.

"Worries about trade war and how the slowdown in China will impact the rest of the world mean stocks appear to be riskier, so there's a typical risk-off move in markets today," said DZ Bank rates strategist Pascal Segesser.

The Fed policymakers, as expected, left interest rates unchanged following a two-day meeting on Thursday. But their policy statement signalled more rate hikes on the way with the next one expected in December, their fourth this year.

Data on Friday showed U.S. producer prices rose more than expected in October and at their fastest pace in six years, fueled by a jump in costs for energy and trade services.

Prices paid by producers rose 0.6 per cent, while analysts polled by Reuters had expected producer prices to rise 0.2 per cent from September.

At 8:48 a.m. ET, Dow e-minis were down 144 points, or 0.55 per cent. S&P 500 e-minis was down 16.25 points, or 0.58 per cent and Nasdaq 100 e-minis were down 65 points, or 0.91 per cent. General Electric fell 4.3 per cent after J.P. Morgan cut price target on the stock to $6 from $10.

Activision Blizzard Inc fell 14.3 per cent after the video game publisher forecast fourth-quarter earnings below analysts' estimates.

Skyworks Solutions Inc also fell 6.5 per cent after the analogue chipmaker provided the weak first-quarter forecast, raising concerns of slowing demand for premium smartphones.

Among the few bright spots, Walt Disney Co, a member of the Dow Jones Industrial Average, rose 1.3 per cent after the media company reported better-than-expected results as its theme parks and Marvel movie "Ant-Man and the Wasp" attracted crowd.

(With inputs from agencies.)


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