Wall Street Stutters as Tech's Stumble Keeps Bulls Sidelined
Investing.com
Published Jul 24, 2020 12:53PM ET
Updated Jul 24, 2020 02:44PM ET
By Yasin Ebrahim
Investing.com – Wall Street fell Friday, as rising U.S. and China tensions and a stumble in tech and health care weighed on sentiment.
The S&P 500 lost 0.49%, while the Nasdaq Composite fell 0.69% and the Dow Jones Industrial Average slumped 0.52%.
Mega-cap tech - with exception of Amazon.com Inc (NASDAQ:AMZN) – struggled to find their footing as Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Facebook Inc (NASDAQ:FB) and Microsoft (NASDAQ:MSFT), making up about 20% of the S&P 500 index, traded below the flatline.
Weakness in chip stocks, led by Intel Corporation (NASDAQ:INTC), meanwhile, exacerbated the decline in tech with the Philadelphia Semiconductor Index down 0.71%. Intel rival Advanced Micro Devices Inc (NASDAQ:AMD), however, surged 16% as the chipmaker is set to benefit from Intel's production woes.
Intel shares slumped 16% as its better-than-expected results for the second quarter, were overshadowed by the delays to the roll out of its next-generation chips.
Health care was also among the biggest declines as investors shunned Covid vaccine-related drug makers that have been bid up recently.
Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE) and Biontech Se (NASDAQ:BNTX), Novavax Inc (NASDAQ:NVAX) and Gilead Sciences (NASDAQ:GILD) were down more than 2%.
Moderna recently lost in a bid to scrap a U.S. patent owned by Arbutus Biopharma (NASDAQ:ABUS) that threatens its efforts to develop mRNA-based vaccines.
In financials, Goldman Sachs was in the spotlight after the Wall Street bank reached a $3.9 billion settlement with Malaysia concerning a multibillion-dollar sovereign wealth fund 1Malaysia Development Bhd (1MDB) scandal.
Shares of Goldman Sachs (NYSE:GS) were roughly unchanged on the day, and the bank also benefited from an upgrade from JPMorgan (NYSE:JPM) to buy from neutral.
The broader market kicked off the session on the back foot as investor sentiment was soured by rising U.S. and China tensions.
China ordered the closure of a U.S. consulate in Chengdu, hitting back against the United States' move earlier this week to close a Chinese consulate in Houston,
On the earnings front, investors had to contend with mixed results that highlighted the impact of the pandemic.
Honeywell (NYSE:HON) fell more than 2.5% as a warning of sales headwinds offset better-than-expected earnings and revenue in the second quarter.
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Boston Beer (NYSE:SAM), meanwhile, produced blowout second-quarter results as earnings were more than double the consensus estimates, sending its shares 24% higher.
On the economic front, home buying activity remained as new homes in June markedly beat economist estimates.
New home sales rose by 13.8% in June to an annualized run-rate of 776,000 units, the highest level since 2007.
"The tightness in the housing market suggests significant upside for home building activity, provided demand can be sustained at current levels. We believe it can, with upside," Jefferies (NYSE:JEF) said.
Written By: Investing.com
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