Global Markets: Tech sell-off weighs again on stocks, dollar slips

NEW YORK - A sell-off in Apple and other tech heavyweights dragged stocks down for a second session on Monday, while the dollar slipped ahead of the US Federal Reserve meeting this week.

The technology sector rout weighed on all three major US stock indexes and raised concerns about lofty US share levels.

The Nasdaq ended down 0.5 percent after falling 1.8 percent on Friday. Apple lost 2.5 percent, though other tech giants Alphabet, Facebook and Microsoft also were down.

At the same time, energy shares added to Friday's gains, suggesting that investors were seeking value. The S&P energy index, which has had the biggest declines among sectors so far this year, ended up 0.7 percent.

"You're seeing people not want to come out of the market. They're selling what's been a winner, rotating into what's been a loser because they want to stay in the market. That's not necessarily a bullish omen because when markets are at tops, people want to stay fully invested," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

The S&P technology index ended down 0.8 percent on Monday, but well off its worst levels of the session and it remains up 17.6 percent for the year to date. The sector had ballooned to its most expensive since early 2008 in terms of price-to-earnings expectations.

The Apple-led worries had taken a heavy toll on Asian rivals, including Samsung overnight, and then hit Europe's big chipmakers STMicro and Dialog.

An ebbing of the reflation trade that was based on U.S. President Donald Trump's tax and spending promises, and a run of negative US economic surprises, have prompted some investors to review the mix of their portfolios.

The Dow Jones Industrial Average fell 36.3 points, or 0.17 percent, to 21,235.67, the S&P 500 lost 2.38 points, or 0.10 percent, to 2,429.39 and the Nasdaq Composite dropped 32.45 points, or 0.52 percent, to 6,175.47.

The pan-European STOXX 600 was down 1 percent, while MSCI's gauge of stocks across the globe was down 0.3 percent.

In the foreign exchange market, the dollar index slipped 0.1 percent, with losses limited by investor expectations the Fed will increase US interest rates this week while other central banks, including the Bank of England and Bank of Japan, are likely to remain on hold.

The euro rose 0.1 percent against the dollar to $1.1205 after pro-European parties scored in French and Italian elections over the weekend.

The first round French parliamentary election results look set to give President Emmanuel Macron a huge majority to push through pro-business reforms, which also helped.

Oil gained on signs of inventory declines in the United States. News that Saudi Arabia will limit volumes of crude to some Asian buyers in July and deepen cuts to the United States also boosted prices.

Brent crude futures ended the session up 14 cents, or 0.3 percent at $48.29 a barrel, while U.S. crude futures gained 25 cents, or 0.6 percent, to settle at $46.08.

US Treasury yields rose after tepid demand at a 10-year Treasury auction offset strong demand at a three-year auction.

Benchmark 10-year Treasuries were last down 3/32 in price to yield 2.211 percent, from a yield of 2.199 percent late on Friday.

source: news.abs-cbn.com

Wall Street falls as Trump honeymoon sours

NEW YORK - Major US stock indexes posted their largest drop so far in 2017 on Monday as investors worried that a curb on immigration ordered by Donald Trump was a reminder that some of the US president's policies are not market-friendly.

An executive order issued by Trump on Friday banned immigration from seven Muslim-majority countries, including legal residents and visa holders, and temporarily halted the entry of refugees. Over the weekend, thousands of people rallied in major US cities and at airports in protest.

US equities had hit a series of record highs following Trump's election in November, encouraged by his promise of tax cuts and simpler regulations.

"Investors focused on the pro-growth of (Trump's) proposals and not those detrimental to economic activity, like protectionism," said Peter Cardillo, chief market economist at First Standard Financial in New York.

He said investors wore blinders to only see the market-friendly policies Trump spoke about during the campaign and the immigration ban was a reminder of actions he could take that could undermine the economy.

Technology, a sector which has openly opposed bans on immigration and hurdles to hiring foreign talent, weighed the most on the S&P 500.

The Dow Jones Industrial Average fell 122.65 points, or 0.61 percent, to close at 19,971.13, the S&P 500 lost 13.79 points, or 0.60 percent, to 2,280.9 and the Nasdaq Composite dropped 47.07 points, or 0.83 percent, to 5,613.71.

It was the largest daily percentage drop for the Dow since October, while the S&P and Nasdaq dropped the most since late December.

Earlier, Trump signed an executive order that would seek to pare back federal regulations by requiring agencies to cut two existing regulations for every new rule introduced.

In an event with small business leaders, Trump took credit for the market rally since Nov. 8:

"The stock market has gone up massively since the election. Everyone's saying 'Oh, the market will go down.' I said 'The market's not going down'."

The Russell 2000 index of small and mid-cap companies fell 1.3 percent Monday, giving back all of January's gains.

The CBOE Volatility index or Wall Street's "fear gauge" rose 1.30 points, the most for any day since Nov. 3.

Stocks fell even as US consumer spending accelerated and a measure of pending home sales rose in December, pointing to sustained domestic demand that could spur economic growth in early 2017.

"Non-economic factors are starting to enter the fray to the detriment of the positive story equity market participants have been anticipating," said Washington, DC-based Wayne Wicker, chief investment officer at retirement plan manager firm ICMA-RC, which says holds about $36 billion in assets under management.

Airline stocks fell, with American Airlines down 4.4 percent and United Continental down 3.6 percent. At least one analyst cited worries over the travel ban to the United States.

"The concern is that (Trump's) travel ban starts to encompass more countries or that there are more stringent restrictions on travel to the U.S.," or other countries retaliate, said Stifel analyst Joseph DeNardi.

Delta, which suffered a systems outage that grounded about 280 flights between Sunday and Monday, fell 4.1 percent.

Also in investors' crosshairs: a Federal Reserve's policy meeting that begins Tuesday, corporate earnings from key companies such as Apple and Facebook and a raft of economic data including Friday's jobs report.

The S&P 500 posted five new 52-week highs and five new lows; the Nasdaq Composite recorded 49 new highs and 42 new lows.

About 6.67 billion shares changed hands in US exchanges, just above the 6.65 billion daily average over the last 20 sessions.

source: news.abs-cbn.com