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Tech stocks lead Wall Street lower
20-May-19 16:20 ET

https://www.briefing.com/investor/markets/stock-market-update/2019/5/20/tech-stocks-lead-wall-street-lower.htm

Dow -84.10 at 25679.90, Nasdaq -113.91 at 7702.35, S&P -19.30 at 2840.23
[BRIEFING.COM] The S&P 500 declined 0.7% on Monday, led lower by the technology stocks. Lingering concerns about Chinese retaliation against U.S. tech companies following U.S. scrutiny of Huawei Technologies dampened general buying interest.

The Dow Jones Industrial Average lost 0.3%, and the Russell 2000 lost 0.7%. The Nasdaq Composite underperformed with a loss of 1.5%.

Alphabet (GOOG 1138.85, -23.45, -2.0%) and many of the semiconductor companies reportedly began suspending business activity with Huawei to comply with new regulation that requires U.S. government approval to work with the Chinese firm. Lumentum Holdings (LITE 44.42, -1.90, -4.1%) cut its fiscal Q4 guidance to reflect lost business from Huawei.

The possibility that other semiconductor companies could also lower their guidance, and the possibility that China could retaliate against U.S. tech companies, weighed heavily on the Philadelphia Semiconductor Index (-4.0%) and the S&P 500 information technology sector (-1.8%).

Despite the gloomy mood in tech space, the broader market had rallied well off its session lows during the day. An overall lack of buying conviction, however, sent stocks back to their opening lows before a rebound in the last 45 minutes of action helped stocks close off those levels.

The S&P 500 real estate (-1.6%), materials (-1.5%), and communication services (-1.2%) sectors joined the tech sector (-1.8%) as the day's worst-performers. The utilities (+0.2%), financials (+0.1%), and energy (+0.1%) sectors were the lone sectors to finish higher.

Apple (AAPL 183.09, -5.91, -3.1%) was a notable underperformer and was further pressured by HSBC cutting its price target to $174 from $180. Tesla (TSLA 205.36, -5.67, -2.7%) finished well off its session lows (-7.5%), but it still closed at its lowest level since Dec. 2016 after Wedbush cut its price target to $230 from $275.

In M&A news, FCC Chairman Ajit Pai indicated his support for the merger deal between T-Mobile US (TMUS 78.29, +2.92, +3.9%) and Sprint (S 7.34, +1.16, +18.9%). Shares surged on the news, but lost steam after a report indicated that the Department of Justice is leaning against the merger.

U.S. Treasuries finished lower despite the negative disposition in equities. The 2-yr yield increased one basis point to 2.22%, and the 10-yr yield increased two basis points to 2.42%. The U.S. Dollar Index declined 0.1% to 97.95. WTI crude increased 0.9% to $63.30/bbl on rising U.S.-Iran tensions and OPEC+ producers signaling that production cuts may last throughout 2019.

Investors did not receive any economic data on Monday. Looking ahead, investors will receive Existing Home Sales for April on Tuesday.

Nasdaq Composite +16.1% YTD
S&P 500 +13.3% YTD
Russell 2000 +13.1% YTD
Dow Jones Industrial Average +10.1% YTD