Nasdaq, S&P drop as tech stocks hammered anew
NEW YORK (Reuters) - The S&P 500 and Nasdaq declined on Thursday as tech stocks stumbled on warnings from chipmakers regarding sales and pricing, as well as on continuing concerns about increased regulation of social media companies.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 31, 2018. REUTERS/Brendan McDermid
The Philadelphia SE Semiconductor index .SOX slid 2.6 percent after executives from Micron Technology Inc (MU.O) and KLA-Tencor Corp (KLAC.O) spoke of ongoing challenges in their segments of the chip market at a Citi conference.
Micron Chief Financial Officer David Zinsner said prices of NAND chips declined in the third quarter, while KLA-Tencor CFO Bren Higgins said his company faced a September “drought” in memory-chip shipments.
Micron shares sank 9.1 percent and were among the biggest drags on the Nasdaq and the S&P. KLA-Tencor shares tumbled 10.4 percent.
Fallout from the scrutiny of social media companies also continued to batter tech stocks. U.S. lawmakers suggested that legislative action may be necessary to counteract foreign efforts to influence U.S. elections and political discourse on social media after executives from Facebook Inc (FB.O) and Twitter Inc (TWTR.N) testified at a Senate Intelligence Committee hearing on Wednesday.
The same day, the U.S. Justice Department said it would meet with state attorneys general to discuss concerns that social media platforms are “intentionally stifling the free exchange of ideas.”
Facebook shares fell 2.5 percent and Twitter shares dropped 5.6 percent. Shares of Snap Inc (SNAP.N), the parent company of Snapchat, touched a record low and were last down 3.2 percent.
“Tech has gotten a free pass on a lot of things this whole cycle,” said Brad McMillan, chief investment officer of Commonwealth Financial Network, an independent broker-dealer in Waltham, Massachusetts. “To go from being the favorite sector that’s changing the world to all of a sudden being highlighted as the bad guys, that’s a big shift.”
The Dow Jones Industrial Average .DJI rose 56.54 points, or 0.22 percent, to 26,031.53, the S&P 500 .SPX lost 7.64 points, or 0.26 percent, to 2,880.96 and the Nasdaq Composite .IXIC dropped 68.56 points, or 0.86 percent, to 7,926.61.
Trade concerns also lingered. The public comment period for proposed tariffs on an additional $200 billion worth of Chinese imports ends on Thursday. China has warned of retaliation if Washington implements any new tariff measures.
Talks between the United States and Canada to renegotiate the North American Free Trade Agreement continued.
Among bright spots, shares of CBS Corp (CBS.N) rose 3.3 percent after reports that the media company’s board was in settlement talks with Chief Executive Les Moonves to negotiate his exit.
Declining issues outnumbered advancing ones on the NYSE by a 1.33-to-1 ratio; on the Nasdaq, a 1.70-to-1 ratio favored decliners.
The S&P 500 posted 41 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 92 new highs and 62 new lows.
Reporting by April Joyner; Additional reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Steve Orlofsky
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