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Tech Shares Slide, Bring S&P Win Streak to an End
07-Jun-18 16:20 ET
Dow +95.02 at 25241.41, Nasdaq -54.17 at 7635.07, S&P -1.98 at 2770.37

https://www.briefing.com/investor/markets/stock-market-update/2018/6/7/tech-shares-slide-bring-s-and-p-win-streak-to-an-end.htm

[BRIEFING.COM] The major averages finished Thursday on a mostly lower note, with the S&P 500 shedding 0.1% to end a four-session winning streak. The Nasdaq and the Russell 2000 retreated from all-time highs, finishing lower by 0.7% and 0.5%, respectively, while the Dow outperformed, adding 0.4%.

Most S&P 500 sectors finished the day in positive territory, with energy (+1.6%) and telecom services (+1.2%) leading the charge. Energy stocks rose with the price of crude oil following reports that Venezuela is nearly a month behind in crude deliveries due to its ongoing economic crisis. WTI crude futures advanced 1.9% to $65.95 per barrel after hitting a two-month low on Wednesday. In addition to energy, the consumer staples (+0.6%) and utilities (+0.4%) sectors also outperformed.

However, the information technology sector -- which is the biggest S&P 500 group, representing a quarter of the broader market by itself -- dropped 1.1%, overpowering mostly modest gains from the ten other groups. Within the space, giants like Microsoft (MSFT 100.88, -1.61), Facebook (FB 188.18, -3.16), and Alphabet (GOOG 1123.86, -13.02) lost between 1.2% and 1.7%, and chipmakers pushed the Philadelphia Semiconductor Index lower by 1.0%.

In Washington, Commerce Secretary Wilbur Ross said the U.S. has struck a deal to end crippling sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team in the next 30 days. Separately, President Donald Trump and Japan's Prime Minister Shinzo Abe held a joint press conference on Thursday, touching on next week's U.S.-North Korea summit.

On the corporate front, Qualcomm (QCOM 60.64, +0.80) and NXP Semi (NXPI 120.07, +5.55) rallied 1.3% and 4.9%, respectively, following reports that China is ready to approve Qualcomm's proposed acquisition of NXP. Meanwhile, J.M. Smucker (SJM 100.80, -5.72) lost 5.4% and Five Below (FIVE 99.05, +17.77) spiked 21.9% after both companies released their quarterly results, and Allergan (AGN 163.27, +7.89) jumped 5.1% following reports that billionaire investor Carl Icahn has built a small position in the drugmaker.

U.S. Treasuries rallied on Thursday, shooting to new highs in the afternoon when emerging market currencies dropped to new lows against the U.S. dollar. There wasn't a news catalyst to credit for the move, but it's worth noting that Indonesia, Turkey, and India have all raised rates recently in an effort to stem capital flight. The iShares MSCI Brazil Capped ETF (EWZ 31.71, -1.77) got clobbered on Thursday, dropping 5.1%, and the iShares MSCI Emerging Markets ETF (EEM 46.42, -0.72) lost 1.5%. The yield on the benchmark 10-yr U.S. Treasury note dropped five basis points to 2.93%.

Reviewing Thursday's economic data, which was limited to weekly Initial Claims and the Consumer Credit report for April:

The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.741 million from a revised count of 1.720 million (from 1.726 million).
The key takeaway from this report is that the low level of initial claims is consistent with a tight labor market.
The Consumer Credit report for April showed an increase of $9.2 billion (Briefing.com consensus $13.9 billion). March credit growth was revised to $12.3 billion from $11.6 billion.
The key takeaway from the report is that the increase in consumer credit was the lowest since September 2017, which suggests rising interest rates may have driven consumers to pay down debt and/or tempered their demand for credit.

On Friday, investors will receive just one economic report, Wholesale Inventories for April (Briefing.com consensus +0.2%).

Nasdaq Composite +10.6% YTD
Russell 2000 +8.6% YTD
S&P 500 +3.6% YTD
Dow Jones Industrial Average +2.1% YTD