Tech, healthcare stocks weigh on Wall Street

 Tech, healthcare stocks weigh on Wall Street

By Amy Caren Daniel

(Reuters) - U.S. stock indexes were lower on Friday as weak earnings reports from Intel and Twitter dragged on the technology sector and as healthcare stocks were pressured by a clutch of disappointing earnings.

Intel sank 8.9 percent after its fast-growing data center business missed estimates amid faced stiff rivalry from Advanced Micro Devices. AMD rose 0.7 percent.

Twitter's shares plunged 19.4 percent after reporting fewer-than-expected monthly active users and warning of further drops as it deletes phony accounts.

The technology sector fell 2.48 percent, the most among the major S&P sectors. Microsoft and Google's parent Alphabet fell 2.9 percent and 3 percent, respectively. Both companies had reported upbeat quarterly results in the past two weeks.

The pressure on tech stocks continued from Thursday when Facebook's dismal forecast caught investors off guard about the growth prospects in a sector that has led the market's march towards record highs.

"So you can continue to have strong fundamentals but if that confidence is shaken a little bit you're going to see a bigger pullback than the fundamentals warrant," said Brad McMillan, chief investment officer for Commonwealth Financial Network.

Eight of the 11 main S&P sectors were lower. Health stocks fell 1.02 percent, after a round of earnings reports which failed to impress investors.

AbbVie fell 4.7 percent after a slight beat on sales of its Humira drug failed to allay concerns on the future of the cash-cow product.

Merck shed 1.2 percent as sales of its blockbuster cancer drug, Keytruda, did not impress investors, who expected bigger gains in market share.

The U.S. economy grew at a 4.1 percent annualized rate in the second quarter, its fastest pace in nearly four years, the Commerce Department said, on higher consumer spending and rushed soybeans shipments to China to beat tariffs.

But economists cautioned against putting much weight on the growth, which matched expectations, as the trade-related boost is expected to unwind later this year.

At 13:01 a.m. EDT the Dow Jones Industrial Average was down 147.80 points, or 0.58 percent, at 25,379.27, the S&P 500 was down 27.65 points, or 0.97 percent, at 2,809.79 and the Nasdaq Composite was down 145.76 points, or 1.86 percent, at 7,706.43.

The S&P is up about 1 percent so far this week, which has seen a large number of marquee companies reporting mixed results and the U.S and the European Union agreeing to negotiate on trade.

The trading in the markets on Friday could by typical of the summer season where volumes are subdued, said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Among gainers, jumped as much as 4 percent to a record high of $1,880.05 after forecasting strong sales and posting a profit that was double analysts' estimates.

Earnings of S&P 500 companies are now expected to rise 22.6 percent in the second quarter, compared with an estimate of 20.7 percent as of July 1, according to Thomson Reuters I/B/E/S.

Declining issues outnumbered advancers for a 1.98-to-1 ratio on the NYSE and a 3.52-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and three new lows, while the Nasdaq recorded 61 new highs and 84 new lows.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jul 28, 2018 00:06:22 IST