Daily Stock Market Update — Thursday, September 6
Technology companies are finishing another day of sharp losses Thursday, although the broader market didn’t fare as badly.
Apple fell 1.7 percent Thursday. Chipmakers sank after a KLA-Tencor executive said business in the fourth quarter looks weaker than the company expected. KLA lost 10.4 percent.
Facebook lost 2.7 percent and Twitter fell 5.9 percent after similar drops the day before.
Industrial companies and big dividend payers canceled out some of those losses. Defense contractor Lockheed Martin rose 2.4 percent and General Mills added 3.2 percent.
KEEPING SCORE: The S&P 500 index fell 10 points or 0.4 percent, to 2,878. The Dow Jones Industrial Average gained 20 points to 25,995.
The Nasdaq composite lost 72 points, or 0.9 percent, to 7,922.
TECH SLUMP: Apple fell 1.8 percent to $222.85. Chipmakers sank after an executive from KLA-Tencor said business in the fourth quarter is looking weaker than the company expected. KLA lost 10 percent to $106.92.
Facebook, Twitter and Alphabet all sank again. They each dropped Wednesday after Congressional hearings on social media.
THE QUOTE: Karyn Cavanaugh, senior markets strategist at Voya Investment Management, said investors are still optimistic about the U.S. economy, which has helped other stocks.
“They know the underlying fundamentals are good,” she said. “Company earnings are not turning tail because of the trade wars and all of the political drama.”
Technology companies have outperformed the broader S&P 500 for the past four years and are on track to do it again this year. Cavanaugh said they have consistently posted very strong profits at a time global economic growth has been slow, and that’s not likely to change.
TRADE UPDATE: The U.S. could put a 25 percent tax on $200 billion in Chinese goods after a public comment period on the proposal expired overnight and media reports have said the tariffs could be announced this week. China has vowed to retaliate.
The U.S. and China have put taxes on $50 billion in imports in the last few months, but larger tariffs would represent a major escalation in their dispute.
Representatives from the U.S. and Canada are set to continue discussions on a deal that would allow Canada to remain in an updated version of the North American Free Trade Agreement.
NETWORKING: CBS stock jumped after the Wall Street Journal reported that CBS and its parent company are in talks to settle a lawsuit. As part of that settlement, National Amusements would give up on its bid to merge CBS with Viacom, which it also controls.
CBS gained 3.5 percent to $54.78 Viacom dipped 0.2 percent to $29.37.
The Los Angeles Times reported that the talks would also pave the way for the departure of longtime CBS CEO Les Moonves. In July, he was accused in a New Yorker article of sexually harassing six women.
Moonves acknowledged he made advances that may have made some women uncomfortable, but he denied allegations he threatened the careers of some of the women afterward.
CRISIS IN EMERGING MARKETS: While the U.S. economy has gained strength this year, investors are worried about the effects of rising interest rates and trade disputes on fast-growing, but often fragile, economies elsewhere. The currencies of Argentina, Turkey and Iran have all hit record lows recently and Venezuela’s currency has lost almost all its value.
While those countries face different problems, the Federal Reserve’s interest rate increases affect all of them by driving up their debt costs and making U.S. assets more attractive. Investors are responding by pulling money out of emerging markets, and that’s exposed financial vulnerabilities.
Some investors fear that big losses in some developing markets could ripple out into the global financial system, as they did in the late 1990s, when several Asian countries eventually required financial rescue.
BONDS: Bond prices turned higher. The yield on the 10-year Treasury note fell to 2.88 percent from 2.90 percent.
ENERGY: Oil prices fell for the second day in a row. Benchmark U.S. crude shed 1.4 percent to $67.77 a barrel in New York. Brent crude, used to price international oils, lost 1 percent to $76.50 a barrel in London.
Wholesale gasoline slid 0.7 percent to $1.95 a gallon. Heating oil slumped 1.1 percent to $2.21 a gallon. Natural gas gave up 0.8 percent to $2.77 per 1,000 cubic feet.
METALS: Gold rose 0.2 percent to $1,204.30 an ounce. Silver fell 0.3 percent to $14.18 an ounce. Copper gained 1 percent to $2.64 a pound.
CURRENCIES: The dollar dipped to 110.85 yen from 111.51 yen. The euro edged up to $1.1626 from $1.1623.
OVERSEAS: Germany’s DAX fell 0.7 percent and in Britain the FTSE 100 lost 0.9 percent. The CAC 40 in France gave up an early gain finished 0.3 percent lower.
Japan’s benchmark Nikkei 225 lost 0.4 percent and the Kospi in South Korea dropped 0.2 percent. Hong Kong’s Hang Seng tumbled 1 percent.
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