Nasdaq Extends 3-day Losses After Chip Stocks Fall

Barry Adams
09 Aug, 2022
New York City

Stocks traded lower on Wall Street and bond yields traded higher ahead of the inflation report Wednesday. 

Investors are increasingly factoring a larger rate hike of at least 75 basis points at the Fed Reserve's next policy meeting in September. 

The Consumer Price Index data for July are scheduled to be released on August 10. 

The inflation index increased 9.1% in June on an annual basis and 1.3% from the previous month on the sustained increase in food and energy prices. 

However, investors are hoping for the inflation to cool down following the 28% decline in crude prices from the peak in March. 

The S&P 500 index declined 0.6% to 4,115.72 and the Nasdaq Composite index dropped 1.6% to 12,444.97. 

Futures of crude oil declined $1.24 to $89.52 and natural gas rose 21 cents to $7.79 a thermal unit. 

The yield on 10-year U.S. Treasury notes rose 2 ticks to 2.78% and on 2-year notes increased to 3.27% ahead of the inflation report Wednesday. 

Chip sector stocks are leading the decliners after Nvidia missed its revenue outlook yesterday and Sony also guided weakening sale of its game console. 

Marvell Technology fell 8.5%, Lam Research dropped 10%, Intel Corporation decreased 2.5%, and AMD fell 5.5%. 

Micron said it plans to invest $40 billion in memory chi production facilities in several phases through the end of the decade. 

The announcement, made ahead of Micron executives joining President Joe Biden at the White House for the signing of the CHIPS and Science Act.  

Micron Tech declined 5.5% to $58.23 after Raymond James lowered its price target to $65 from $72. 

Signet Jewelers Ltd dropped 13.5% to $58.50 after the jewelry chain lowered its full-year revenues outlook to between $6.7 billion and $7.6 billion and $7.7 billion from the previous range between $8.03 billion and $8.25 billion. 

The company cited "heightened pressure on consumers' discretionary spending and increased macroeconomic headwinds."

Signet also announced the acquisition of Blue Nile for $360 million in cash. 

The online retailer of engagement rings and fine jewelry delivered revenues of more than $500 million 2021. 

Nielsen Holdings surged 21.2% to $27.54 after the company postponed its meeting with a hedge fund WindAcre, the largest shareholder in the company with a 27% stake. 

Nielsen  today postponed the court meeting and the special meeting of its shareholders to finalize a preliminary agreement with WindAcre to join a consortium of private equity and receive $28 a share a share, the same price to be paid to all other shareholders for its remaining shares.