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While you were sleeping: Tech stocks slide

Tuesday 26th September 2017

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Slides in technology stocks including those of Apple and Facebook led Wall Street lower as concern about intensifying tension between North Korea and the US weighed on sentiment.

Apple shares moved lower, trading 1.1 percent weaker as of 2.09pm in New York, amid reports that demand for its iPhone 8 appears tepid.  

"Orders of the new iPhone have disappointed the market," Alan Tseng, Taipei-based vice president at Capital Investment Management, told Bloomberg. 

In 2.08pm trading in New York, the Dow Jones Industrial Average declined 0.3 percent, while the Nasdaq Composite Index dropped 1 percent. In 1.54pm trading, the Standard & Poor’s 500 Index slid 0.3 percent. 

“What you are seeing is those tech names pulling back,” Quincy Krosby, chief market strategist at Prudential Financial, told Bloomberg. The fact is that right now, you have a fully valued market and little catalysts at this point to push the market higher. ”

The Dow fell as slides in shares of Visa and those of Microsoft, recently down 2.2 percent and 1.7 percent respectively, outweighed gains in shares of Exxon Mobil and those of General Electric, recently up 1.3 percent and 1.1 percent respectively.

The VIX, or the Chicago Board Options Exchange Volatility Index which measures expectations of future volatility in stocks, climbed 11.8 percent to 10.72.  

Meanwhile, US Treasuries gained, sending the yield on the 10-year note three basis points lower to 2.218 percent, according to Bloomberg.

Investors are awaiting a speech by Federal Reserve Chair Janet Yellen, set to speak on Tuesday, following the Federal Open Market Committee’s hawkish tone at the end of last week’s meeting. 

On Monday, New York Fed President William Dudley said he expects inflation will accelerate with “the fading of effects from a number of temporary, idiosyncratic factors,” firming up bets the central bank will increase its target interest rate in December.  

“I expect inflation will rise and stabilise around the FOMC’s 2-percent objective over the medium term,” Dudley said in a speech in Syracuse, New York. “In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually.”

In Europe, the Stoxx 600 Index ended the day with a 0.2 percent advance from the previous close. 

Germany’s DAX Index eked out a 0.02 percent gain, as advances in shares of Merck and those of Bayer offset a drop in shares of RWE and those of Commerzbank.

The euro weakened after elections in Germany showed worse-than-expected support for Chancellor Angela Merkel’s conservatives. 

“Investors were expecting a victory for Angela Merkel, but there has been a surprise in the relatively poor performance of the CDU and SPD, who suffered their worst results since 1949,” Nick Peters, multi asset portfolio manager at Fidelity International, wrote in a note, Bloomberg reported.

The UK’s FTSE 100 Index fell 0.1 percent, while France’s CAC 40 Index declined 0.3 percent.

(BusinessDesk)

 

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