Stocks close lower as Apple falls, rates rise
by onlysureshot.com |
U.S. stocks fell on Thursday after a major Asian chipmaker delivered a disappointing forecast which dragged the technology sector lower. Investors also fretted over rising interest rates.
The announcement weighed on the entire technology sector. Shares of Apple fell 2.8 percent, while Nvidia, Micron and Advanced Micro Devices all declined at least 2.4 percent. The VanEck Vectors Semiconductor ETF (SMH) dropped 4.5 percent in its worst day since Dec. 1, 2016.
Wall Street also kept an eye on rising interest rates, as the 10-year Treasury note yield broke above 2.9 percent. The 10-year traded around these levels earlier this year, sparking a correction in the U.S. stock market as investors feared the inflation was rising faster than expected. The move higher on the benchmark U.S. yield came as the two-year yield traded near highest levels in nearly a decade.
"The market is looking tired as yields may soon be a constraining factor that could overshadow good earnings," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Thursday's dip came after the S&P 500 and Nasdaq posted slight gains on Wednesday, boosted by strong corporate earnings from United Airlines and CSX.
The corporate earnings season continued on Thursday, as Procter & Gamble, Bank of New York Mellon and Blackstone all reported better-than-expected earnings. Procter & Gamble, however, dropped 3.3 percent.
Earnings have been strong thus far. According to Thomson Reuters I/B/E/S, 77 percent of the S&P 500 companies that had reported through Thursday morning surpassed earnings expectations. Meanwhile, 75 percent of those companies topped sales estimates.
"We've been fairly happy with the results thus far," said Shannon Saccocia, chief investment strategist at Boston Private. But noted investors are "looking for great results as they search for the next catalyst to take us higher."
Elsewhere in corporate news, Amazon CEO Jeff Bezos revealed the company has 100 million Prime members in his annual letter to shareholders. The stock rose nearly 2 percent.
In data news, weekly jobless claims totaled 232,000, slightly more than expected. The Philadelphia Fed index hit 23.2 for April, higher than a Reuters estimate of 20.