US: Wall Street slips as dour earnings, chip stocks weigh

WALL Street’s main indexes fell in choppy trading on Wednesday with chip stocks among the top losers, while downbeat earnings reports from some industry majors, including insurer Travelers, added to the losses.

All three indexes pared initial gains as chip stocks were pressured, with the Philadelphia Semiconductor Index dipping 1.7 per cent. AI giant Nvidia lost 1.7 per cent.

Weighing on the Dow, Travelers dropped 8.2 per cent after the insurance giant missed Wall Street expectations for first-quarter profit.

JB Hunt Transport Services shed 8.3 per cent after the trucking firm missed Wall Street estimates for first-quarter results.

US Bancorp dropped 5.3 per cent after the lender cut its forecast for full-year interest income and reported a 22 per cent fall in first-quarter profit.

Abbott Laboratories fell 4 per cent as investors signaled disappointment over its annual forecast.

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Warehouse-focused real estate investment trust Prologis eased 6 per cent after lowering its full-year forecast for core funds from operations.

The risk sentiment remained fragile after top US central bank officials including Fed Chair Jerome Powell refrained from providing any guidance on when interest rates may be cut. On Tuesday, they said monetary policy needed to be restrictive for longer, dashing investors’ hopes for meaningful reductions in borrowing costs this year.

“At this point, the market can handle these (high) rates. It had a little bit of a hiccup and the scare was also combined with the geopolitical problems that we’ve had in the Middle East,” said Joe Saluzzi, partner, co-founder and co-head of equity trading at Themis Trading.

“You put those two together (and you have) a good recipe for a sell-off.”

Fed Board Governor Michelle Bowman and Cleveland Fed President Loretta Mester are scheduled to speak later in the day.

Money market participants see an around 43 per cent chance that the Fed could begin its easing cycle in July, according to the CME FedWatch tool.

Government bond yields eased from the multi-month highs scaled in the previous session, with the 10-year note last at 4.6181 per cent.

On the bright side, United Airlines gained 12.4 per cent after it forecast stronger-than-expected numbers in the current quarter.

Other airline stocks, such as American Airlines, Delta Air Lines and Southwest Airlines, added between 1.5 per cent and 3.2 per cent.

At 11.30 am ET, the Dow Jones Industrial Average was down 139.48 points, or 0.37 per cent, at 37,659.49, the S&P 500 was down 20.54 points, or 0.41 per cent, at 5,030.87, and the Nasdaq Composite was down 93.75 points, or 0.59 per cent, at 15,771.51.

Eight of the 11 major S&P 500 sectors were trading lower, with information technology and real estate being some of the worst hit.

Among other stocks, Mobileye advanced 3.3 per cent after Reuters reported the Israeli automotive tech company was set to ship at least 46 million new assisted-driving chips.

Eli Lilly gained 0.9 per cent after its weight-loss drug helped reduce episodes of irregular breathing in patients with obstructive sleep apnea across two late-stage trials.

Advancing issues outnumbered decliners by a 1.20-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.21-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and seven new lows, while the Nasdaq recorded 14 new highs and 139 new lows. REUTERS