US STOCKS-S&P, Nasdaq fall as Apple drags, jobless claims data fuels rate jitters
07/09/2023 21:36
(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, chip index sells
off
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Weekly jobless claims fall
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Indexes: Dow up 0.17%, S&P down 0.32%, Nasdaq down 0.89%
(Updates prices after close, adds volume data)
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 a sell-off 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 2.9%, for
its second straight day of losses 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
down 1.6%, 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. But
investors worried this would help push 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 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 Craig Fehr, head of
investment strategy at Edward Jones, who called Thursday's
decline "a cautious defensive stance."
Minutes before the close, New York Fed President John
Williams said it was an "open question" whether monetary policy
is restrictive enough to bring the economy back into balance.
"We’ve got policy in a good place, but we’re going to need to
continue to be data dependent,” he said, pointing to upcoming
data releases due before the Fed's September meeting.
The Dow Jones Industrial Average .DJI rose 57.54 points,
or 0.17%, to 34,500.73, the S&P 500 .SPX lost 14.34 points, or
0.32%, to 4,451.14 and the Nasdaq Composite .IXIC dropped
123.64 points, or 0.89%, to 13,748.83.
The Dow outperformed the S&P and Nasdaq because Apple has a
lower weighting 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
S&P sectors, rising 1.3%, which Edward Jones' Fehr took as
another sign of the market's risk-off mood.
The Philadelphia semiconductor index .SOX fell 1.98% while
shares of Apple suppliers including Skyworks Solutions SWKS.O ,
Qualcomm QCOM.O and Qorvo QRVO.O all fell 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 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 and Alibaba BABA.N fell more than 4%
while and Baidu BIDU.O lost 3.4%.
Also helping to keep the Dow afloat was a 1% rise in
McDonald's MCD.N shares after Wells Fargo upgraded the stock
to "overweight".
Automation software firm UiPath PATH.N rallied 11.5% on an
upbeat annual revenue forecast.
Declining issues outnumbered advancing ones on the NYSE by a
1.80-to-1 ratio; on Nasdaq, a 2.03-to-1 ratio favored decliners.
The S&P 500 posted 13 new 52-week highs and 26 new lows;
the Nasdaq Composite recorded 22 new highs and 268 new lows.
On U.S. exchanges 9.76 billion shares changed hands
compared with the 10.10 billion moving average for the last 20
sessions.
(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))