International Development News
Development News Edition
Give Feedback

US STOCKS-Apple, Broadcom hold back Wall Street gains


Reuters Washington DC
Updated: 13-09-2019 20:48 IST
US STOCKS-Apple, Broadcom hold back Wall Street gains

Image Credit: Flickr

Losses for U.S. technology majors Apple and Broadcom overturned early gains on Wall Street on Friday, as traders balanced the latest indicators on an uncertain global growth outlook with perceived progress in reducing Sino-U.S. trade tensions. Broadcom Inc, among the world's biggest chipmakers, weighed on the tech-heavy Nasdaq after it said in results late on Thursday that demand for microchips had bottomed out and that a recovery was not yet on the cards.

That pointed to more headwinds for tech companies buffetted this year by the trade conflict and added to a handful of negative signals for Apple, including a Goldman Sachs cut in its price target for the stock, citing concerns over its new Apple TV+ service. After an otherwise upbeat start for Wall Street, the two companies together were the main driver in bringing the S&P 500 back to earth.

Having risen to within 0.4% of its record high in early trading, the benchmark index was up just 0.2% by 11 a.m. et., with financial stocks up 0.44%. "The monitor would be painted with green if not for Apple, Broadcom and Amazon," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Banks followed U.S. Treasury yields higher after data showed U.S. retail sales rose 0.4% in August, lifted by spending on cars, building materials, healthcare and hobbies. Economists polled by Reuters had forecast an increase of 0.2%. "(The data) demonstrates that consumers are still opening their wallets as low unemployment and high consumer confidence coupled with better wages is driving increased consumer spending," said Moody's Vice President Mickey Chadha.

If early gains hold, markets are set for their third straight week of gains, having already recouped losses from August when escalating trade tensions and the inversion of a key part of the U.S. yield curve drove investors toward assets perceived to be safe-havens in the event of a downturn. The doubts about growth remain but have been soothed this week by a combination of signals of central bank support for the economy and U.S. President Donald Trump's latest comments that he was potentially open to an interim trade deal with China.

On Friday, China's official Xinhua News Agency said the country would exempt some U.S. pork and soybeans from additional tariffs on U.S. goods. Tyson Foods Inc, the United States' largest meat processor, rose 3.4%.

"If you are hoping for a trade deal, the comments that President Trump made are probably the best you could expect right now," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. However, Pavlik added that a trade deal - interim or otherwise - was not likely to be signed before the 2020 presidential election.

The trade conflict has taken a toll on U.S. manufacturing and tempered global growth, with the International Monetary Fund forecasting that the tit-for-tat tariffs between the United States and China could reduce global GDP in 2020 by 0.8%. Investors are now expecting the U.S. Federal Reserve to cut rates at its policy meeting next week. The European Central Bank announced a sweeping stimulus drive on Thursday to prop up the euro zone economy.

At 10:12 a.m. ET the Dow Jones Industrial Average was up 28.62 points, or 0.11%, at 27,211.07, the S&P 500 was down 0.39 points, or 0.01%, at 3,009.18 and the Nasdaq Composite was down 19.78 points, or 0.24%, at 8,174.69.

Also Read: Apple to supply parts to independent repair shops for first time

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

COUNTRY : United States