Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2018. REUTERS/Brendan McDermid
April 19, 2018
By Sruthi Shankar
(Reuters) – 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 <AAPL.O> 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) <2330.TW>, 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 <TSM.N> shares fell about 5 percent, leading a host of chipmakers lower. Among them AMD <AMD.O> and Nvidia <NVDA.O> fell more than 2 percent, while Intel <INTC.O> 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 <AXP.N> was up 3.4 percent after the credit card issuer topped Wall Street profit estimates and Alcoa <AA.N> 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 <1YMc1> were down 53 points, or 0.21 percent, and S&P 500 e-minis <ESc1> fell 6.75 points, or 0.25 percent. Nasdaq 100 e-minis <NQc1> dropped 19.25 points, or 0.28 percent.
Shares of some of the biggest consumer companies fell after results. Philip Morris <PM.N> was down 4.4 percent after its revenue missed estimates, while Procter & Gamble <PG.N> 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 U.S. crude inventories declined. [O/R]
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
