US STOCKS-S&P, Nasdaq fall as Apple drags, jobless claims data fuels rate jitters
07/09/2023 19:47
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
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Apple drops amid concerns over China iPhone curbs
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McDonald's gains on Wells Fargo upgrade
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Weekly jobless claims fall
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Indexes: Dow up 0.13%, S&P down 0.38%, Nasdaq down 1.0%
(Updated at 1430 EDT/ 1830 GMT)
By Sinéad Carew and Shristi Achar A
Sept 7 (Reuters) -
The S&P 500 and Nasdaq fell on Thursday, with the biggest
drag from Apple and weakness in chip stocks over concerns about
China's iPhone curbs, while a fall in weekly U.S. jobless claims
fed worries about interest rates and sticky inflation.
S&P heavyweight Apple AAPL.O was on track for its second
straight day of losses, down 3.5%, after news China widened
curbs on iPhone use by state employees, requiring staff at some
central government agencies to stop using their mobiles at work.
Bloomberg reported that China planned to broaden the iPhone
ban to state firms and agencies.
The drag from Apple, its suppliers and companies with large
China exposure pushed the S&P 500 technology sector .SPLRCT
down 1.9%, making it the biggest percentage decliner among the
benchmark's 11 major sectors.
A U.S. Labor Department report showed the number of
Americans filing for unemployment claims fell to 216,000 for the
week ended Sept. 2, hitting the lowest level since February.
Investors uncertain about the Federal Reserve's path for
interest rates awaited inflation readings from August, due out
in a week.
"Markets are stuck in between the softening economy
(potentially) giving the Fed more flexibility and resilience in
the economy, which keeps the Fed hamstrung," said Craig Fehr,
head of investment strategy at Edward Jones.
"There is that very, very small eye of the needle with
which the Fed can thread monetary policy that's sufficiently
tight, but not so tight that it wrecks the economy. It's a small
eye but, it's not completely closed," 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 stood at 93%, yet the chances for another pause in the
November meeting were at a much lower 53.5%, according to the
CME Group's FedWatch Tool.
The Dow Jones Industrial Average .DJI rose 44.13 points,
or 0.13%, to 34,487.32, the S&P 500 .SPX lost 16.79 points, or
0.38%, to 4,448.69 and the Nasdaq Composite .IXIC dropped
138.79 points, or 1%, to 13,733.69.
The Dow was outperforming the S&P and Nasdaq because Apple
ranks just 11th in the cyclicals-heavy index, which is
price-weighted compared with the market capitalization-weighted
S&P 500 .SPX. , where Apple is one of the biggest weights.
Defensive utilities .SPLRCU was the biggest gainer among
the S&P sectors, which Edward Jones' Fehr saw another sign of
the market's risk-off mood on Thursday.
The Philadelphia semiconductor index .SOX was down 2%
while shares of Apple suppliers including Skyworks Solutions
SWKS.O , Qualcomm QCOM.O and Qorvo QRVO.O were all down
more than 7%.
Rick Meckler, partner at Cherry Lane Investments said the
news from China refocused investors on the idea "that the
relationship between the U.S. and China is a big risk to current
equity prices, particularly in technology."
Also denting sentiment, data showed China's exports and
imports fell in August, with sagging overseas demand and weak
consumer spending hitting businesses in the world's
second-largest economy.
Shares of U.S.-listed Chinese firms also fell with PDD
Holdings PDD.O off more than 5%, JD.com JD.O and Alibaba
BABA.N down more than 4% and Baidu BIDU.O off over 3%.
Philadelphia Fed President Patrick Harker did not comment on
the likely U.S. monetary policy path. Investors will monitor
other Fed speaker comments due later, including policy voting
member and New York Fed President John Williams.
Also keeping the Dow afloat was a 1% rise in McDonald's
MCD.N after Wells Fargo upgraded the stock to "overweight".
Automation software firm UiPath PATH.N added 10.5% on an
upbeat annual revenue forecast.
Declining issues outnumbered advancing ones on the NYSE by a
1.75-to-1 ratio; on Nasdaq, a 1.98-to-1 ratio favored decliners.
The S&P 500 posted 12 new 52-week highs and 26 new lows;
the Nasdaq Composite recorded 17 new highs and 238 new lows.
(Reporting by Shristi Achar A and Amruta Khandekar in
Bengaluru; Additional reporting by Johann M Cherian; Editing by
Vinay Dwivedi and David Gregorio)
((Shristi.AcharA@thomsonreuters.com;))