Tech stocks weigh on Wall Street

 Tech stocks weigh on Wall Street

By April Joyner

NEW YORK (Reuters) - Wall Street's major indexes were lower on Friday as weak earnings reports from major technology companies weighed on the sector.

Intel Corp shares sank 8.7 percent after the chipmaker's data centre business missed estimates amid stiff rivalry from Advanced Micro Devices Inc . AMD shares rose 1.6 percent.

Twitter Inc shares plunged 19.1 percent after the social media network reported a decline in monthly active users, versus the increase analysts had expected, and warned of further drops as it deletes phoney accounts.

The S&P 500 technology index <.SPLRCT> fell 2.2 percent, the most among the major S&P sectors. Shares of Apple Inc , which is set to report quarterly results on Tuesday, fell 1.9 percent. Shares of Microsoft Corp and Alphabet Inc , which had soared after both companies recently reported strong quarterly results, dropped 2.0 percent and 2.7 percent, respectively. Earlier in the day, Alphabet shares hit a record high.

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

"These have been absolutely high-flying stocks, white-hot," said Chad Morganlander, portfolio manager at Washington Crossing Advisors in Florham Park, New Jersey. "Any deceleration in performance applies tremendous pressure to the group....It forces the market to take a breather."

The Dow Jones Industrial Average <.DJI> fell 98.19 points, or 0.38 percent, to 25,428.88, the S&P 500 <.SPX> lost 22.56 points, or 0.80 percent, to 2,814.88 and the Nasdaq Composite <.IXIC> dropped 126.72 points, or 1.61 percent, to 7,725.46.

The Nasdaq was on pace for its biggest daily percentage drop since June 25, a day after registering its greatest one-day percentage decline in a month.

Intel and Twitter's disappointing results overshadowed data from the Commerce Department that the U.S. economy grew at a 4.1 percent annualised rate in the second quarter, its fastest pace in nearly four years, on higher consumer spending and as farmers rushed soybean shipments to China to beat tariffs.

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

AbbVie Inc shares fell 3.5 percent after sales of its Humira drug in the second quarter barely beat Wall Street views, raising concerns about the drug's viability as a cash-cow. Inc shares jumped as much as 4 percent to a record high of $1,880.05 after the ecommerce giant forecast strong sales and posted a profit that was double analysts' estimates. Amazon shares were last up 0.4 percent.

Declining issues outnumbered advancing ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 3.52-to-1 ratio favoured decliners.

The S&P 500 posted 24 new 52-week highs and three new lows; the Nasdaq Composite recorded 61 new highs and 93 new lows.

(Reporting by April Joyner in New York; Additional reporting by Amy Caren Daniel in Bengaluru; Editing by Leslie Adler)

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

Updated Date: Jul 28, 2018 02:05:18 IST