INSUBCONTINENT EXCLUSIVE:
Wall Street's main indexes dropped on Friday, as shares of chipmakers sank on a warning from sector major Broadcom of a broad weakening in
global demand and Chinese data pointed to the worst slowdown in industrial growth in 17 years.
Shares of Broadcom Inc plunged 6.83% after it
cut its full-year revenue forecast by $2 billion, blaming the United States -China trade conflict and export curbs on Huawei Technologies Co
Ltd.
Shares of Apple Inc also slipped 1.66% and weighed the most on the three main indexes
Broadcom is a major supplier to the iPhone maker.
"Broadcom is definitely leading markets lower and that might drive other chips lower as
Some of it is also about the United States -China trade war and the fight over Huawei," said Kim Forrest, chief investment officer at Bokeh
Capital Partners in Pittsburgh.
Meanwhile, China's industrial output growth in May slowed below expectations and showed signs of weakening
demand, sending a chill through stock market investors globally.
Losses in chip companies, who both source product and sell heavily in
China, dragged the benchmark S-P 500 index lower, with the Philadelphia Semiconductor index tumbling 3%
Technology stocks fell 1.06%, the most among the 11 major S-P sectors.
"China was to be expected because tariffs are having an effect on
them and that's starting to show up," Forrest said.
At 9:57 a.m
ET the Dow Jones Industrial Average was down 99.94 points, or 0.38%, at 26,006.83, the S-P 500 was down 10.68 points, or 0.37%, at 2,880.96
and the Nasdaq Composite was down 50.39 points, or 0.64%, at 7,786.74.
The S-P 500 index has gained 4.7% in June so far and was on track to
end the week slightly higher, on hopes the Federal Reserve will soon cut interest rates.
A Fed meeting next week may provide the acid test
of market expectations that the United States central bank could cut rates as much as three times this year, while a G20 summit at the end
of the month may yet yield more progress on a trade deal.
Data showed United States retail sales increased in May, although slightly below
expectations, which could ease fears the domestic economy was slowing down sharply in the second quarter.
"It's important to remember that
softening economic data does not mean recessionary economic data," Mike Loewengart, vice-president of investment strategy at E*Trade
Financial in New York, said.
Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE and a 2.17-to-1 ratio on the
Nasdaq.
The S-P index recorded 20 new 52-week highs and one new low, while the Nasdaq recorded 22 new highs and 30 new lows.
