Wall Street steadies, Broadcom warning hits chip stocks
By Caroline Valetkevitch NEW YORK (Reuters) - U.S. stocks were flat to lower in late afternoon trading on Friday, though a warning from Broadcom of a broad weakening in global demand weighed on chipmakers. Shares of Broadcom Inc fell 5.5% after it cut its full-year revenue forecast by $2 billion, blaming the U.S.-China trade conflict and export curbs on Huawei Technologies Co Ltd.
By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks were flat to lower in late afternoon trading on Friday, though a warning from Broadcom of a broad weakening in global demand weighed on chipmakers.
Shares of Broadcom Inc fell 5.5% after it cut its full-year revenue forecast by $2 billion, blaming the U.S.-China trade conflict and export curbs on Huawei Technologies Co Ltd.
Shares of Apple Inc also slipped 0.85% and weighed the most on the S&P 500 and the Nasdaq. Broadcom is a major supplier to the iPhone maker.
Losses in chip companies, who both source product and sell heavily in China, dropped sharply. The Philadelphia Semiconductor index tumbled 2.60%.
Adding to China worries, Chinese data pointed to the worst slowdown in industrial growth in 17 years. China's industrial output growth in May slowed below expectations and showed signs of weakening demand.
A Federal Reserve meeting next week may provide the test of market expectations that the U.S. central bank could cut interest rates as much as three times this year, while a G20 summit at the end of the month may yet yield more progress on a trade deal.
"The key is going to be any progress with China ... There might be other headlines, but the bottom line is that's what's going to move the market materially. Otherwise, you're going to get this drifting up and back down," said Alan Lancz, president of Alan B. Lancz & Associates Inc. investment advisory firm based in Toledo, Ohio.
The Dow Jones Industrial Average rose 30.35 points, or 0.12%, to 26,137.12, the S&P 500 was unchanged to 2,891.64 and the Nasdaq Composite dropped 20.90 points, or 0.27%, to 7,816.23.
Stocks are primed for a selloff should the Fed fail to take an even more dovish tilt after policymakers raised expectations for a rate cut in recent weeks.
The S&P 500 index has so far gained 4.9% in June and was on track to record a second straight week of gains on hopes the Fed will soon cut rates.
In a bright spot, data showed U.S. retail sales increased in May and sales for the prior month were revised higher, suggesting a pick-up in consumer spending that could ease fears the economy was slowing down sharply in the second quarter.
Online pet products retailer Chewy Inc rose 55% in its market debut on Monday, at a valuation of over $14 billion, and joined a host of high-profile companies, such as Lyft Inc and Uber Technologies Inc that listed on U.S. stock exchanges this year.
Declining issues outnumbered advancing ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.59-to-1 ratio favoured decliners.
The S&P 500 posted 33 new 52-week highs and three new lows; the Nasdaq Composite recorded 43 new highs and 73 new lows.
(Additional reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Arun Koyyur and James Dalgleish)
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