Wall Street slips as Huawei report adds to trade concerns
By Medha Singh
(Reuters) – U.S. stocks edged lower on Friday after rebounding strongly a day earlier, as investors grappled with fresh trade tensions, political turmoil in Italy and a surprise contraction in Britain’s economy.
Shares of chipmakers and other tariff-sensitive technology companies (SPLRCT) came under pressure after a report that Washington was delaying a decision about allowing some trade between U.S. firms and China’s telecom equipment maker Huawei again.
The Philadelphia SE semiconductor index (SOX) fell 1.16%, while Apple Inc (O:AAPL) slipped 0.6%.
In Europe, Italy’s ruling League party Deputy Prime Minister Matteo Salvini called for early elections; while Britain’s economy shrank for the first time since 2012, raising concerns as the country gears up to leave the European Union in October.
“Political uncertainty in the eurozone is adding an additional variable that the market has to juggle around with. That, coupled with the GDP numbers and the trade war, is giving investors an indigestion,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
“Until we get some sort of tangible answers to what the (Trump) administration is going to do with China, this is going to be a overhang on the market, creating plenty of sharp swings.”
U.S. stocks roared back on Thursday, recording their best one-day percentage gain in two months in what has been a turbulent week for the markets dominated by a symbolic drop in China’s currency.
At 9:50 a.m. ET, the Dow Jones Industrial Average (DJI) was down 82.56 points, or 0.31%, at 26,295.63 and the S&P 500 (SPX) was down 12.15 points, or 0.41%, at 2,925.94. The Nasdaq Composite (IXIC) was down 54.54 points, or 0.68%, at 7,984.62.
Investors seeking safety helped the defensive sectors, including utilities (SPLRCU) and real estate , outperform the other major S&P sectors this week.
Shares of Uber Technologies Inc (N:UBER) shed 9.4% after the ride-hailing company reported a record $5.2 billion loss and revenue that fell short of Wall Street targets.
DXC Technology (N:DXC) tumbled 31.4% after the IT and consulting services provider cut its full-year profit and revenue forecast.
Nektar Therapeutics (O:NKTR) shares plunged 38.2% after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg.
Declining issues outnumbered advancers for a 1.73-to-1 ratio on the NYSE and for a 1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and three new lows, while the Nasdaq recorded 35 new highs and 39 new lows.