Apple, Philip Morris, chip stocks lead Wall Street slide; financials gain

 

US stocks dropped on Thursday, weighed down by a broad-based decline in technology stocks from Apple to chipmakers as well as a tumble in consumer staples such as Philip Morris and P&G.

A warning from Taiwan Semiconductor (TSMC), the world's largest contract chipmaker and an Apple supplier, on soft demand for smartphones and on the semiconductor industry's growth this year sparked a tumble in chip stocks.

Apple's shares also fell 2.3 percent, with analysts telling Reuters that TSMC's warning was related to the iPhone maker. Apple was the biggest drag on the Dow Jones Industrial Average and the Nasdaq.

TSMC's US-listed shares fell 6.3 percent. Intel declined 3.1 percent, falling the most on the Dow. All stocks on the Philadelphia SE Semiconductor index were in the red, with the index itself tumbling 3.9 percent.

The S&P consumer staples sector declined 3.2 percent as Philip Morris plunged 17.4 percent after the tobacco company's weak results and forecast.

Philip Morris was the biggest drag on the S&P and also dragged rival Altria down 7.8 percent.

Also weighing was Procter & Gamble, which dropped 2.5 percent after the Dow component said shrinking retailer inventories and higher commodities and transportation costs squeezed its margins.

At 11:23 a.m. EDT the Dow Jones Industrial Average was down 57.28 points, or 0.23 percent, at 24,690.79, the S&P 500 was down 15.70 points, or 0.58 percent, at 2,692.94 and the Nasdaq Composite was down 53.47 points, or 0.73 percent, at 7,241.77.

Still, not everything was gloomy.

The financial sector was up a healthy 1.1 percent, helped by a jump in American Express and as bank stocks bounced with 10-year Treasury yields reaching near one-month highs.

AmEx jumped 7.1 percent after the credit card issuer topped Wall Street profit estimates as record investments in card rewards contributed to higher customer spending.

"What's happening in this season is even if you meet, that's not good enough, you've got to beat convincingly," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

Of the 52 companies among the S&P 500 that have reported first-quarter earnings through Wednesday, 78.8 percent topped profit expectations, according to Thomson Reuters data.

Another bright spot was Amazon, which gained 1.6 percent after the e-commerce retailer said it now has more than 100 million Amazon Prime members globally.

Declining issues outnumbered advancers by a 2.00-to-1 ratio on the NYSE and by a 1.58-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and 11 new lows, while the Nasdaq recorded 80 new highs and 37 new lows.