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Apple drops amid concerns over iPhone ban in China
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McDonald’s gains on Wells Fargo upgrade
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Weekly unemployment claims declined
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Indices: Dow up 0.13%, S&P down 0.38%, Nasdaq down 1.0%
(Updated at 1430 EDT/1830 GMT)
by Sinead Carew and Srishti Achar
September 7 (Reuters) –
The S&P 500 and Nasdaq declined on Thursday, with Apple’s biggest drop and chip stocks weighed down by concerns about China’s iPhone sanctions, while a drop in weekly US jobless claims raised concerns about interest rates and sticky inflation. Gave birth to
S&P heavyweight Apple trailed losses for the second day in a row, falling 3.5%, following news that China would extend its ban on iPhone use by state employees, asking employees of some central government agencies to stop using their mobiles at work. The need arose.
Bloomberg reported that China plans to extend the iPhone ban to state firms and agencies.
Pressure from Apple, its suppliers and companies with large exposures to China pushed the S&P 500 technology sector down 1.9%, making it the biggest percentage decliner among the benchmark’s 11 major sectors.
A report from the US Labor Department showed that the number of Americans filing unemployment claims fell to 216,000 in the week ending Sept. 2, the lowest level since February.
Investors uncertain about the Federal Reserve’s path for interest rates are awaiting inflation readings from August, which are due in a week.
“Markets are caught between (potentially) softening of the economy, giving the Fed more flexibility and flexibility in the economy, which has kept the Fed in trouble,” said Craig Fehr, head of investment strategy at Edward Jones.
“There is that very small eye of the needle with which the Fed can tighten monetary policy enough, but not so much that it ruins the economy. It is a small eye, but, it is not closed completely. is,” said Fehr, who called the market’s decline a “cautious defensive stance” ahead of the next inflation data.
Bets on the Fed to leave interest rates unchanged in September were 93%, according to CME Group’s FedWatch tool, yet the chances of another pause at the November meeting were much lower at 53.5%.
The Dow Jones Industrial Average rose 44.13 points, or 0.13%, to 34,487.32, the S&P 500 fell 16.79 points, or 0.38%, to 4,448.69 and the Nasdaq Composite fell 138.79 points, or 1%, to 13,733.69.
The Dow was outperforming the S&P and Nasdaq because Apple ranked just 11th in the cyclical-heavy index, which is price-weighted compared to the market capitalization-weighted S&P 500, where Apple is one of the largest weights.
Defensive utilities had the biggest gains among S&P sectors, which Edward Jones’ Fehr saw on Thursday as another sign of the market’s risk-averse mood.
The Philadelphia Semiconductor Index was down 2% while shares of Apple suppliers including Skyworks Solutions, Qualcomm and Corvo were down more than 7%.
Rick Meckler, partner at Cherry Lane Investments, said the news from China has refocused investors on the idea that “the relationship between the US and China is a major risk to current equity prices, especially in technology.”
Also, data showed China’s exports and imports declined in August, as a slump in foreign demand and weak consumer spending hit business in the world’s second-largest economy.
Shares of US-listed Chinese companies also fell, with PDD Holdings down more than 5%, JD.com and Alibaba down more than 4% and Baidu down more than 3%.
Philadelphia Fed President Patrick Harker did not comment on a possible US monetary policy path. Investors will be watching for other Fed speaker comments later, including those from policy polling member and New York Fed President John Williams. McDonald’s gained 1%, keeping the Dow afloat after Wells Fargo upgraded the stock to “overweight.”
Automation software firm UiPath added 10.5% to its annual revenue forecast.
Declining issues outnumbered advancing issues on the NYSE by a 1.75-to-1 ratio; On the Nasdaq, a 1.98-to-1 ratio favored declines.
The S&P 500 posted 12 new 52-week highs and 26 new lows; The Nasdaq Composite recorded 17 new highs and 238 new highs. (Reporting by Srishti Achar A and Amrita Khandekar in Bengaluru; Additional reporting by Johan M Cherian; Editing by Vinay Dwivedi and David Gregorio)
Source: finance.yahoo.com
