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Twitter, tech stocks hit as Wall St turns lower

Twitter, tech stocks hit as Wall St turns lowerNEW YORK: US stocks headed lower on Wednesday with technology bearing the brunt of falls soon after opening as investors worried over rising bond yields, corporate costs and rising trade tensions with China.

Shares of the world’s biggest planemaker, rose 1.65 percent and provided some support to the Dow Jones Industrial Average index after it reported a higher-than-expected quarterly profit and raised full-year forecast for earnings and cash flow.

The yield on 10-year US Treasury notes, the benchmark for global interest rates, held above 3 percent after crossing the level for the first time in four years on Tuesday, stoking concerns about higher borrowing rates for companies.

The Wall Street Journal also reported the US Department of Justice has opened a criminal investigation into Chinese tech company Huawei Technologies Co over US sanctions on Iran, potentially adding to tensions with Beijing.

Twitter, initially up 10 percent after a strong set of quarterly results, flipped to a 4 percent fall on the day.

All the 11 major S&P sectors were lower, led by a 0.93 percent decline in the industrial sector as shares of 3M and United Tech fell.

Caterpillar fell 0.6 percent, down for the second day after its management noted first-quarter earnings would be the “high water mark” for the year and warned of higher material costs.

Investors are watchful about other companies raising such warnings, as inflation is picking up and the Federal Reserve is in no mood to put the brakes on its own rate-hike program.

“The markets are reacting to yields moving higher,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “The new trading range will continue to cap equities from positively responding to good earnings news.”

Reuters data shows that analysts are now estimating 21.1 percent profit growth in the first quarter among the S&P 500 companies, compared with 18.6 percent growth rate at the start of the earnings season.

At 9:53 a.m. ET, the Dow Jones Industrial Average was down 131.4 points, or 0.55 percent, at 23,892.73. The S&P 500 fell 0.58 percent to 2,619.37 and the Nasdaq Composite dropped 0.61 percent to 6,964.33.

The CBOE Volatility index, a gauge of short-term stock market volatility jumped to more than 1-week high to 19.41 points.

Viacom rose 1.94 percent after the media company reported better-than-expected quarterly results.

Twitter reversed course to trade down 4.9 percent after reporting its second profitable quarter and topping Wall Street estimates for revenue and monthly active users.

Facebook which is set to report after market closes on Wednesday, was down 1.55 percent.

Copyright Reuters, 2018

Source: Brecorder

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