NEW YORK: Wall Street was on track to open lower on Thursday dragged by declines in chip stocks following a weak forecast from Taiwan Semiconductor, the world’s largest contract chipmaker.
Apple shares were also off 1.7 percent in premarket trading. Brokerage Mizuho Securities USA said weak demand for iPhone 8 models could dent the company’s third-quarter forecast.
Taiwan Semiconductor (TSMC), which is also an Apple supplier, lowered its own full-year forecast due to softer demand for smartphones and cut its outlook for global semiconductor industry growth this year.
TSMC’s shares fell about 5 percent, leading a host of chipmakers lower. Among them AMD and Nvidia fell more than 2 percent, while Intel was off 1.14 percent.
“We are in a digestion period where we are inundated with massive amounts of information. On balance, things look great, the (profit) growth rate is at mid 20 percent on S&P … it certainly shows we’re off to a good to start,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.
Of the 52 companies among the S&P 500 that have reported first-quarter earnings through Wednesday, 78.8 percent topped profit expectations, according to Thomson Reuters data.
Overall profits at S&P 500 companies is expected to have increased 19.4 percent in the first quarter, the biggest in seven years.
American Express was up 3.4 percent after the credit card issuer topped Wall Street profit estimates and Alcoa rose 3.7 percent after the aluminum producer reported strong results and raised its full-year earnings forecast.
At 8:35 a.m. ET, Dow e-minis were down 53 points, or 0.21 percent, and S&P 500 e-minis fell 6.75 points, or 0.25 percent. Nasdaq 100 e-minis dropped 19.25 points, or 0.28 percent.
Shares of some of the biggest consumer companies fell after results. Philip Morris was down 4.4 percent after its revenue missed estimates, while Procter & Gamble dropped 1.6 percent despite better-than-expected results.
Oil prices rose to their highest since late 2014 after sources told Reuters top exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel and as US crude inventories declined.
Source: Brecorder
