Wednesday, 17 Apr 2024

Wall Street reverses gains as Apple pulls tech stocks lower

(Reuters) – U.S. stocks turned lower on Wednesday as Apple Inc (AAPL.O) led a decline in technology stocks, offsetting early support from tame U.S. consumer prices data and a rebound in oil prices.

The iPhone maker’s shares fell 2 percent, extending its losses for the fifth straight day. A raft of profit warnings from Apple’s suppliers has fueled investor concerns that iPhone sales, in terms of volume, have hit a wall.

The S&P technology index .SPLRCT was down 0.8 percent, hurt by losses in Microsoft Corp (MSFT.O) and Adobe Inc (ADBE.O).

Markets earlier got a boost from data that showed U.S. consumer prices increased 0.3 percent in October amid a rise in gasoline and rental costs, but were in line with expectations.

The S&P energy index .SPNY which had risen in morning trade on a rebound in oil prices, following a 7 percent plunge on Tuesday, also gave up gains.

“The markets never really left correction mode and it will be with us for a while, at least till the selling into strengths keeps happening,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

An escalating trade war between the United States and China, worries about rising interest rates and slowing corporate profits have stalled gains for U.S. stocks, with the S&P 500 trading about 7 percent below its record level.

At 11:41 a.m. ET the Dow Jones Industrial Average .DJI was down 159.75 points, or 0.63 percent, at 25,126.74, the S&P 500 .SPX was down 16.07 points, or 0.59 percent, at 2,706.11 and the Nasdaq Composite .IXIC was down 48.96 points, or 0.68 percent, at 7,151.91.

The S&P 500 gained 0.6 percent at the open, reversing later in the day as all the 11 major S&P sectors moved into the red.

“We would think if it were a sustained move higher, volatility coming into the end of year would be lower than 19 or 20,” said Laurence Benedict, founder of Opportunistic Trader.

“People are forgetting that on Monday the market was down 600 points, basically we’re trying to stabilize at lower levels.”

The CBOE Volatility index .VIX, an indicator of short-term volatility in the stock market, touched more than 1-week high at 21.20 points.

The S&P utilities index .SPLRCU fell 1.06 percent after PG&E Corp (PCG.N) slumped 22.7 percent on warnings it could face “significant liability” in excess of its insurance coverage in the event that its equipment was found to have caused the blaze in California..

Snap Inc (SNAP.N) fell 3 percent after Reuters reported that U.S. regulators have subpoenaed the social media app maker for information about its March 2017 initial public offering.

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