Global markets skid again as tech and retail stocks retreat

Oil prices drop as supply concerns resurface

NEW YORK, Nov 20, (Agencies): Stocks are skidding Tuesday morning as weak results from retailers and mounting losses for big technology companies push the market back into the red for the year.

Energy companies are slumping because of a 5 percent drop in the price of oil. Industrial companies are also dropping as the downward momentum in stocks builds after steep losses Monday.

The S&P 500 index lost 36 points, or 1.4 percent, to 2,654 as of 11:19 am Eastern time. The benchmark index is now 9.4 percent below the peak it reached in late September.

The Dow Jones Industrial Average sank 427 points, or 1.7 percent, to 24,590. It was down as much as 596 earlier.

Investors lately have been quick to bail out of companies that show rising costs are eating into profits and that was the case with retailers Tuesday. Tech stocks were among the biggest losers in Europe, too. Nokia and Ericsson, two top suppliers of telecom networks, each fell more than 3 percent. SAP, which provides business software and cloud computing services, was down over 2 percent. Chip maker Infineon Technologies fell about 3 percent.

The tech-heavy Nasdaq composite lost 88 points, or 1.2 percent, to 6,940. The Russell 2000 index of smallercompany stocks shed 15 points, or 1 percent, to 1,481.

Benchmark US crude lost 4.7 percent to $54.47 a barrel in New York. Brent crude, used to price international oils, fell 3.8 percent to $64.28 per barrel in London. Oil prices were little changed Monday, but they’ve plunged since early October.

Investors looked for safer options. Utility companies managed small gains and bond prices edged higher. The yield on the 10-year Treasury note fell to 3.05 percent from 3.06 percent.

In Europe, Germany’s DAX index lost 1.4 percent and France’s CAC 40 shed 1.1 percent. London’s FTSE 100 retreated 0.7 percent.

Tokyo’s Nikkei 225 lost 1.1 percent and Hong Kong’s Hang Seng shed 2 percent while Seoul’s Kospi retreated 0.9 percent.

Nissan fell over 5 percent in Asia as traders there got their first chance to react to the news that its chairman, Carlos Ghosn, who engineered a turnaround at the automaker, was arrested on charges he underreported his income and misused company funds and will be fired.

The dollar fell to 112.40 yen from 112.54 yen. The euro fell to $1.14 from $1.1453.

US

The S&P 500 hit a three-week low on Tuesday, as weak earnings from retailers including Target and Kohl’s as well as a fall in energy shares added to worries for Wall Street, which is still reeling from a technology selloff.

Target Corp shares slumped 10.65 percent after the retailer’s third-quarter profit missed analysts’ estimates as investments in its online business, higher wages and price cuts hurt margins.

Department store operator Kohl’s Corp shed 9.46 percent after its full-year profit forecast fell below expectations.

Warnings from retailers prompted caution ahead of the holiday season, increasing selling pressure on equities as investors fret about a slowdown in global growth, peaking corporate earnings and rising interest rates.

Apple Inc shares fell 3.69 percent amid concerns about slowing demand for iPhones. The stock, which has led the market through much of its bull run, is at its lowest level since early May.

The tech-heavy Nasdaq fell to its lowest level in more than seven months and is now down about 14.6 percent from its record closing high in late August.

Home improvement chain Lowe’s Cos Inc fell 4.40 percent after it unveiled more restructuring plans in the face of worse-than-expected comparable sales numbers.

TJX Cos Inc slipped 5.1 percent after the off-price retailer’s holidayquarter earnings forecast fell largely below estimates. Smaller rival Ross Stores fell 7.2 percent as its fourthquarter forecast for same-store sales came below analysts’ expectations.

The S&P 500 retailing index lost 2 percent, falling for eight straight sessions.

At 11:34 am EDT the Dow Jones Industrial Average was down 496.90 points, or 1.99 percent, at 24,520.54, the S&P 500 was down 42.00 points, or 1.56 percent, at 2,648.73 and the Nasdaq Composite was down 96.47 points, or 1.37 percent, at 6,932.01.

Signs of slowing demand for Apple’s iPhones have wide-ranging implications for technology and internet companies.

Should Apple’s loss hold through the day, its shares would have lost more than 20 percent of their value, or around $250 billion, since closing at a record high on Oct 3.

Goldman Sachs trimmed its price target on Apple for the second time in just over a week, saying the balance of price and features in the new iPhone XR may not have been well-received by users outside of the United States.

The FANG group clawed back early losses, with Facebook Inc turning positive. Amazon.com Inc, Netflix Inc and Alphabet Inc were trading flat or up 0.6 percent.

The S&P energy index tumbled 2.6 percent as oil prices plunged another 5 percent amid concerns about rising global supplies.

Declining issues outnumbered advancers for a 5.68-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 2.84-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 41 new lows, while the Nasdaq recorded six new highs and 230 new lows.

Europe

Fresh anxieties about tech stocks dented European stocks as a drop in Apple shares on Wall Street, after a report the consumer tech giant is cutting production for its new iPhones, sapped appetite for the sector globally.

The tech sector sank as much as 1.7 percent, hitting its lowest level since Feb 28 2017 as stocks supplying chips to Apple suffered.

Apple suppliers were among the worst-performing. STMicroelectronics shares tumbled 3 percent, Infineon fell 3 percent, and AMS lost 3 percent.

Tech has lost its crown as best-performing sector in Europe and is now down 8 percent this year, behind sectors including oil, healthcare, media, and utilities.

The pan-European STOXX 600 fell 0.4 percent by 0825 GMT, with Germany’s DAX down 0.7 percent and Britain’s FTSE 100 down 0.2 percent.

Shares in French carmaker Renault remained under pressure after its 8.4 percent drop on Monday when CEO Carlos Ghosn was arrested. Downgrades from Exane and BAML analysts weighed the stock down 1.3 percent.

Outside tech, results drove the biggest moves.

German payments firm Wirecard’s shares fell 4.5 percent to the bottom of the DAX after the company said it expected core earnings between 740 and 800 million euros, implying profits growth of 37.5 percent - at the midpoint of the range.

British electrical components maker Halma rose 2.7 percent, among top STOXX 600 gainers after the company reported a 19 percent jump in pretax profit for the six months ended Sept 30.

It also warned Brexit could cause supply chain disruptions.

Asia

Technology firms led a sell-off across Asian markets Tuesday on fresh concerns about demand for Apple’s iPhones, while Japanese car giants Nissan and Mitsubishi plunged on news chairman Carlos Ghosn had been arrested over alleged financial misconduct.

After a brief couple of days of stability, panic returned to trading floors following a report that the US titan had slashed production of its popular handset.

That comes just a week after a supplier suggested the firm had cut orders, fanning speculation the latest incarnation of the gadget is not selling as much as hoped.

Apple collapsed four percent in US trade with Facebook, Amazon, Google parent Alphabet and Microsoft each diving three percent or more.

The losses filtered through to Asia, where Apple suppliers were also in trouble.

In Tokyo, Japan Display collapsed more than 10 percent and has now lost around a third of its value over the past week, while Alps Electric fell 1.8 percent. Among other tech firms Sony shed 3.1 percent and in Hong Kong market heavyweight Tencent shed 3,3 percent while Sunny Optical Technology lost 2.4 percent.

Taiwan Semiconductor Manufacturing Company shed 1.8 percent in Taipei and Delta Electronics was off 1.6 percent.

Hong Kong fell two percent, Shanghai ended off 2.1 percent, while Sydney, Seoul, Singapore, Wellington, Bangkok and Taipei also saw sharp losses.

Key figures around 0820 GMT - Tokyo - Nikkei 225: DOWN 1.1 percent at 21,583.12 (close)

Hong Kong - Hang Seng: DOWN 2.0 percent at 25,840.34 (close)

Shanghai - Composite: DOWN 2.1 percent at 2,645.85 (close)

Dollar/yen: DOWN at 112.53 yen from 112.54 yen

Oil

Oil prices dropped sharply on Tuesday, snapping a four-day winning streak amid concerns about rising global supplies as OPEC weighs a possible cut in production.

Growing fears of an economic slowdown, which saw global stock markets tumble again, added further pressure on crude.

Brent crude futures, the international benchmark for oil prices, were at $65.62 a barrel at 1342 GMT, down $1.17, or 1.77 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $56.19 per barrel, down $1.01, or 1.77 percent.

Oil prices are around a quarter below their recent peaks in early October, weighed down by surging supply, especially from the United States, as well as a slowdown in global trade.

US crude production has soared almost 25 percent this year, to a record 11.7 million barrels per day (bpd).

Currencies

Sterling retreated during Tuesday as a rally in the dollar in a broadly riskaverse market prompted traders to cut risky bets, with uncertainty over Brexit negotiations also sapping demand.

The dollar rallied nearly half a percent against its rivals as U.S. stocks, oil and the euro dropped in a broadbased selloff across global markets.

The pound was down 0.25 percent at $1.2815, retreating nearly half a percent from the day’s highs $1.2884.

But despite the weakness in the pound, the moves were very tiny compared to its rivals such as the euro and the Canadian dollar which weakened by 0.6 and 0.8 percent respectively.

Earlier, sterling had rebounded off lows after Bank of England Governor Mark Carney gave his backing to a Brexit deal struck by Prime Minister Theresa May last week.