Technology sector pulled Wall Street lower
Wall Street index declined on Monday, mostly under the pressure of the technology sector in the context of the start-up reporting season. Concerns about the economic downturn in China also affected the mood of the markets.
The blue-chip index Dow Jones Industrial Average wiped out 86.11 points, while the broader benchmark S&P 500 moved down 0.53%, driven by losses in the technology, healthcare and utility sectors. The technology index Nasdaq Composite reported a decline of 0.94%.
The S&P 500's YTD gain of 3.6% primarily to the cessation of tax loss selling in the New Year. The list of the biggest S&P 500 losers in 2018 we published last month is up an average of 9.5% YTD, a data point which supports this idea.
The decline on Monday comes after strong growth last week. In addition, the Dow Jones and the S&P 500 broke the three-week winning series after the good start of 2019.
China's exports unexpectedly dropped by 4.4%. The China trade data reinforced concerns that U.S. tariffs on Chinese goods were taking a toll on the world’s second-largest economy, prompting companies such as Apple Inc to issue a profit warning.
Chipmakers, which get a sizable portion of their revenue from China, took a hit, with the Philadelphia SE semiconductor index down by 1.01%. Trade-sensitive Boeing Co and Caterpillar Inc also declined.
Corporate stocks performance
Among the Dow Jones stocks, Caterpillar declined for a second consecutive day, falling by 0.8%. The heavy machinery company remains above its 50-day line after last week's over-3% gain.
Meanwhile, Apple stock fell by nearly 1.5%, extending a losing streak to two trading sessions. The stock's relative strength line continues to plumb new lows, indicating sharp stock market underperformance.
The shares of Netflix and Alphabet fell by at least 1%.
Meanwhile, yoga-gear maker Lululemon rose about 7% after the firm raised its full-year earnings and revenue guidance. Lululemon stock is trying to pass resistance around the 140 price level.
The stocks of the chip maker Broadcom fell 0.8%, as it continues to etch a handle onto a long base pattern.
Among other stocks, PG&E Corp plunged 47.58% after the biggest US power utility said it was preparing to file for Chapter 11 bankruptcy for all of its businesses.
Corporate earnings report
Corporate earnings increased significantly in the first three quarters of last year, rising by at least 25% during this period.
S&P 500 earnings are expected to grow by 12.6% in the fourth quarter.
The US investment bank Citigroup reported a surprising drop in quarterly revenues as a result of the much lower performance of its business by trading fixed-income instruments hit by the volatility of financial markets at the end of the year. The revenue was down 2% from the previous year. Excluding a one-time tax-related gain, the quarterly profit of Citigroup rose to 4.2 billion USD, or 1.61 USD per share, in the quarter ended December 31.
Citigroup reported fixed-income revenue of 1.94 billion USD, below forecasts of 2.23 billion USD.
The Canadian SaaS solutions developer Destiny Media Technologies reported first quarter fiscal year 2019 results with revenue raising by 1.0% to 0.98 million CAD. The company features the renewed agreement with Universal Music with a 14% increase in monthly fees commencing following the quarter (January 1, 2019). Destiny Media Technologies keeps its strong balance sheet with a continued increase in a working capital position to 2.5 million USD.
Posted from my blog with SteemPress : http://financeandmarkets.com/technology-sector-pulled-wall-street-lower/
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