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Wall Street slides as Huawei fallout hits tech shares; Apple falls 3%

S&P 500 technology stocks dropped 1.75%, the largest percentage decline among the benchmark index's 11 major sectors

Reuters  |  New York 

Wall street, market
A broker looks at financial information on computer screens on the IG Index trading floor in London on Tuesday. Photo: Reuters

US stocks slid on Monday as the White House's restrictions on Chinese Technologies Co Ltd weighed on the and raised concerns that the move would further inflame trade tensions between the and

Since the added to a trade blacklist last week, several have suspended business with the world's largest Alphabet Inc's has moved to stop providing with access to its proprietary apps and services, Reuters reported on Sunday. also announced that it has discontinued shipments to Huawei.

Other chipmakers, including Intel Corp, Inc, and Broadcom Inc, will not supply the Chinese company until further notice, according to a report.

S&P 500 dropped 1.75%, the largest percentage decline among the benchmark index's 11 major sectors. The Philadelphia Semiconductor Index, which includes Huawei suppliers Qualcomm, Broadcom and Micron Technology Inc, tumbled 4% to hit its lowest level in more than two months.

Shares of slumped 3.1%, making them the biggest drag on Wall Street's major indexes. The maker's shares were also pressured after warned that higher prices for the company's products following the latest increases in tariffs could have "dire consequences" on demand.

"The political risk now has become a business risk," said Chad Morganlander, at in Florham Park, "This could affect in a meaningful way earnings expectations for many tech names."

The Dow Jones Industrial Average fell 84.1 points, or 0.33%, to 25,679.9, the S&P 500 lost 19.3 points, or 0.67%, to 2,840.23, and the Composite dropped 113.91 points, or 1.46%, to 7,702.38.

After touching record highs at the beginning of May, Wall Street's main indexes have succumbed to selling pressure on mounting concerns about a prolonged US-trade war. The S&P 500 is on track to post its worst monthly decline since the December sell-off, trading nearly 4% below its all-time high.

"The further the trade war goes, the more escalation keeps happening," said Matt Watson, at in Alpha, "We're not going in and trying to do a lot of buying at this point."

Among gainers, shares of and rose after came out in favour of the merger of the two telecom Sprint and T-Mobile pared gains, however, after reported that the US Department of Justice was leaning against approving the deal.

Still, Sprint shares ended 18.8% higher while T-Mobile shares rose 3.9%.

shares declined 5.9% after the company said it would buy from in an $800 million deal, though the shares pared losses in afternoon trading.

Declining issues outnumbered advancing ones on the NYSE by a 2.03-to-1 ratio; on Nasdaq, a 1.81-to-1 ratio favoured decliners.

The S&P 500 posted 25 new 52-week highs and 11 new lows; the Composite recorded 35 new highs and 152 new lows.

Volume on US exchanges was 6.4 billion shares, compared to the 7.01 billion average for the full session over the last 20 trading days.

 

(Reporting by April Joyner; Additional reporting by and in Bengaluru; Editing by and Leslie Adler)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, May 21 2019. 03:35 IST
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