Sellers Gain Upper Hand On Wall Street, Semiconductor Stocks Drop 5%

Barry Adams
17 Jul, 2024
New York City

Stocks on Wall Street faced selling pressure as investors adjusted portfolios for the probable rate cut, rising trade tensions with China, and escalating political rhetoric ahead of the U.S. presidential election. 

The S&P 500 index and the Nasdaq Composite decreased more than 1% and 2%, respectively, as selling accelerated on Wall Street. 

Semiconductor stocks led the decline, with AMD, Nvidia, ASML, Broadcom, TSMC, and Apple dropping between 3% and 8%.

Donald Trump, the Republican Party candidate for the U.S. president and a convicted felon, ramped up political rhetoric to impose additional tariffs on imports from Chinese companies. 

Moreover, U.S. President Joe Biden's administration is also looking to place additional penalties on companies sharing advanced semiconductor manufacturing technology with China. 

On the economic front, housing starts and completions were ahead of the market's expectations, the U.S. Census Bureau reported Wednesday. 

Housing starts in June increased 3% from the previous month to an annualized rate of 1.353 million, building permits rose 3.4% to 1.446 million, and completions soared 10.1% to 1.71 million. 

Building permits declined 3.1% from the corresponding month a year ago, and housing starts fell 4.4% over the same period. 

Housing starts growth was driven by a 22% surge from the previous month in five units or more to 360,000, overcoming the 2.2% decline in single-family starts in June to an annual rate of 980,000. 

Privately-owned housing completions reached an annual rate of 1.71 million, an increase of 10.1% from the revised May estimate of 1.553 million, 15.5% higher than the 1.48 million rate in the corresponding month a year ago. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.4% to 5,651.06, and the Nasdaq Composite fell 1.2% to 18,210.50.

The yield on 2-year Treasury notes edged higher to 4.48%, 10-year Treasury notes decreased to 4.19%, and 30-year Treasury bonds edged higher to 4.39%.

WTI crude oil increased $0.84 to $81.61 a barrel, and natural gas prices edged down 1 cent to $2.18 a thermal unit.

Gold increased by $5.45 to $2,473.07 an ounce, and silver was down 33 cents to $30.73. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 103.72.

 

U.S. Stock Movers 

Semiconductor shares plunged after a Bloomberg report suggested that President Joe Biden's administration is looking to impose a tougher penalty on companies sharing advanced technologies with China. 

Nvidia declined 5.4% to $119.53, AMD dropped 7.1% to $165.03, ASML Holding plunged 10.9% to $953.52, and BE Semiconductor fell 5.7% to $174.45. 

Taiwan Semiconductor decreased 7.2% to $172.66 after Republican Party U.S. President candidate and convicted felon said that Taiwan should pay the U.S. for defending the nation. 

Five Below plunged 17.5% to $84.33 after the deep discount retailer lowered its second quarter outlook and announced the departure of chief executive Joel Anderson. 

Net sales in the fiscal first quarter ending on May 4 increased 11.8% to $811.9 million from $726.2 million, net income decreased to $31.5 million from $37.5 million, and diluted earnings per share fell to 57 cents from 67 cents a year ago. 

Comparable same-store sales decreased by 2.3% compared to the quarter in 2023. 

The company estimated fiscal second quarter sales between $830 million and $850 million, net income between $32 million and $38 million, and diluted earnings per share between 57 cents and 69 cents. 

U.S. Bancorp rose 4.3% to $45.15 after the bank reported better-than-expected quarterly results. 

Total revenue in the second quarter declined 4.3% to $6.9 billion from $7.2 billion, net income increased $1.6 billion from $1.4 billion, and diluted earnings per share increased to 97 cents from 84 cents.