U.S. Stocks Slide, Dragged Down by Tech Sector
20 May 2019 - 3:41PM
Dow Jones News
By Avantika Chilkoti and Michael Wursthorn
Shares of technology companies fell Monday after the Trump
administration moved to curb Huawei Technologies Co.'s access to
U.S. technology, pushing major stock indexes lower to start the
week.
The Dow Jones Industrial Average fell 164 points, or 0.7%, to
25603 in early morning trading, while the S&P 500 declined
0.8%. The tech-heavy Nasdaq Composite fell further, shedding
1.6%.
Investors' trade anxieties ratcheted higher as U.S. companies
cut Huawei's access to their technology following the Trump
administration's decision last week to put the Shenzhen-based
telecom giant on a trade blacklist. Google parent Alphabet will
restrict Huawei's access to certain Android features, while
Qualcomm has suspended shipment of its chips, The Wall Street
Journal reported.
Shares of technology companies fell broadly, with chip makers
and hardware manufacturers among the hardest hit. Investors worried
the move against Huawei will further inflame the situation between
the U.S. and China, which has only deteriorated in recent weeks
following a new round of tariffs from both sides.
That has investors positioning themselves for more bouts of
volatility, a sign that many expect the market's erratic swings to
continue. Assets in exchange-traded funds that tend to profit when
volatility rises hit a record $3.1 billion in May, according to
FactSet data.
At this stage, the main issue is gauging the impact of fresh
uncertainty on the global economy through weakened sentiment and
via financial markets, according to Marco Valli, head of macro
research at UniCredit, rather than the direct impact of lower
global trade.
The S&P 500's technology sector tumbled more than 2%. Shares
of Apple were among the hardest hit, falling 4.3%. Alphabet
declined 2.5%.
Qualcomm, meanwhile, dropped 5.4%.
In Europe, the Stoxx Europe 600 was down 1.4% in recent trading.
In Asia, the Shanghai Stock Exchange dropped 0.4% and Hong Kong's
Hang Seng Index dropped 0.6%. Japan's Nikkei gained 0.2%.
Shares in Germany's largest lender Deutsche Bank briefly dipped
below an all-time low and were down 3% after analysts at UBS
recommended investors sell the stock.
The transportation and technology services sectors also dragged
European markets lower on Monday. Ryanair dropped 3.7% after the
Dublin-based carrier posted disappointing earnings.
This week, investors will be watching for data on U.S. home
sales and eurozone purchasing managers surveys on Thursday.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and
Michael Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
May 20, 2019 10:26 ET (14:26 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.