US STOCKS-S&P, Nasdaq fall as Apple drags, jobless claims data fuels rate jitters
07/09/2023 21:00
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(Updates with preliminary closing prices at 1600 EDT/ 2000 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.
Shares in S&P heavyweight Apple Inc AAPL.O fell for a
second straight day on news that China had 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
lower making it the biggest percentage decliner among the
benchmark's 11 major sectors during the session.
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. But
investors worried this could encourage the Federal Reserve to
continue with tight monetary policy, pressuring stocks.
"The weekly claims was big news this morning, good news
being construed as bad news and it's hard to ignore the news out
of China," about Apple said Sahak Manuelian, managing director
and head of equity trading at Wedbush Securities.
Investors were also warily anticipating inflation
readings from August, due out in a week.
Due partly to the recent sharp rise in oil prices,
Manuelian pointed to "some fretting among investors that
inflation might start to pick up again, which isn't crazy."
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.
"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 said Craig Fehr, head of
investment strategy at Edward Jones, who called Thursday's
decline "a cautious defensive stance."
According to preliminary data, the S&P 500 .SPX lost 13.94
points, or 0.31%, to end at 4,451.54 points, while the Nasdaq
Composite .IXIC lost 123.64 points, or 0.89%, to 13,748.83.
The Dow Jones Industrial Average .DJI rose 60.44 points, or
0.18%, to 34,503.63.
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 outperforming S&P sectors
during the session, which Edward Jones' Fehr saw another sign of
the market's risk-off mood on Thursday.
The Philadelphia semiconductor index .SOX fell while
shares of Apple suppliers including Skyworks Solutions SWKS.O ,
Qualcomm QCOM.O and Qorvo QRVO.O were in the red all day.
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 about the world's second-largest
economy, data showed China's exports and imports fell in August.
Shares of U.S.-listed Chinese firms PDD Holdings
PDD.O , JD.com JD.O , Alibaba BABA.N and Baidu BIDU.O also
Fell.
Also keeping the Dow afloat was a rise in McDonald's MCD.N
shares after Wells Fargo upgraded the stock to "overweight".
Automation software firm UiPath PATH.N rallied on an
upbeat annual revenue forecast.
(Reporting by Sinéad Carew in New York, Shristi Achar A and
Amruta Khandekar in Bengaluru; Additional reporting by Johann M
Cherian; Editing by Vinay Dwivedi and David Gregorio)
((sinead.carew@thomsonreuters.com; +13322191897))