Midday Report: US Stocks Drop With Oil; Gold Jumps to Seven-Year High; Apple Sales Warning Underscores China Coronavirus Impact on 2nd Quarter

Tuesday, February 18, 2020 1:04 PM | MT Newswires

US Stocks fell after a sales warning from the iPhone maker Apple (AAPL) took the wind out of semiconductor stocks' sails, and the Treasuries and gold signaled a risk-off environment in which oil also slumped.

The Dow Jones Industrial Average fell by 246.88 points intraday, or 0.8%, with S&P 500 and Nasdaq also down by 0.6% and 0.4%, respectively. Financials and energy were among the steepest decliners, while utilities the biggest gainer by after midday on Tuesday.

The US 10-year yields fell by 4.2 basis points to just under 1.55%, with West Texas Intermediate futures down almost 1% and gold surging by more than $20 per ounce to its highest level since January 2013, a cross-market setup validating caution in equity markets in the US, as well as many parts of Europe and Asia.

Apple advised on Monday that it does not expect to meet its previously projected second-quarter revenue guidance as ramp-up at its Chinese iPhone manufacturing partner site facilities -- which had temporarily closed due to the coronavirus outbreak -- was taking place more slowly than it had anticipated.

In its first-quarter results, published on Jan.28, Apple had projected that second-quarter revenue would be in the range of $63 billion to $67 billion. In Monday's statement, the company said that since that guidance had been issued, there had been a slower return to normal conditions than it had anticipated in China and lower customer traffic at its Chinese stores.

The iShares PHLX Semiconductor ETF (SOXX), an exchange-traded fund of chipmakers, fell by 1.2%, reflecting concern over the extent of challenges that companies will face with significant exposure to China, the epicenter of the coronavirus outbreak, which has now killed about 1,880 people while infecting more than 72,000.

Meanwhile, Anglo-Australian miner BHP Group (BHP) posted double-digit growth in underlying earnings for the fiscal first half on Tuesday but raised the possibility that it might have to revise its expectations for commodity demand growth downwards if the pandemic is not "well contained within the March quarter."

Shares of Conagra Brands (CAG) slumped by 8% intraday, the steepest decliner on S&P 500 after the company said it was cutting profit and revenue guidance for fiscal 2020 because of weaker holiday sales and retail performance in January. CenturyLink's (CTL) shares were the second-worst performer on the index, down 5%, after MoffettNathanson downgraded the stock to sell from neutral with a price target of $10, versus $13.90 as of the close on Friday.

In economic news, the NAHB Housing Market Index in the US fell to 74 in February from 75 in the previous month, slightly below market expectations of 75, according to data compiled by Trading Economics.

Crude was down $0.43 to $51.62 per barrel. Natural gas was up $0.12 to $1.96 per 1 million BTU. Gold was up $20.60 to $1,607 an ounce, and silver up $0.42 to $18.15 an ounce. Copper was flat at $2.60 per pound.

Among energy ETFs, the United States Oil Fund was down about 1% to $10.87 with the United States Natural Gas Fund surged by 6% to $15.20. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 2.7% to $29.04 while SPDR Gold Shares were up 1.2% to $150.77. The iShares Silver Trust was up 2.3% to $16.94.

Here's where the markets stood at midday:

US MARKETS

NYSE Composite Index was down 103.16 points (-0.7%) to 13,994.18

Dow Jones Industrial Index was down 246.88 points (-0.8%) to 29,156.75

S&P 500 was down 19.55 points (-0.6%) at 3,360.55

Nasdaq Composite Index was down 40.54 points (-0.4%) to 9,690.96

GLOBAL SENTIMENT

FTSE 100 was down 51.24 points (-0.7%) to 7,382.01

DAX was down 102.70 points (-0.8%) to 13,681.19

CAC 40 was down 29.13 points (-0.5%) to 6,056.82

Nikkei was down 329.44 points (-1.4%) to 23,193.80

HSI was down 429.40 points (-1.5%) to 27,530.20

Shanghai Comp was up 1.35 points (+0.1%) to 2,984.97

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 103.42 points (-1.1%) to 8,972.74

NYSE Financial Sector Index was down 85.83 points (-1%) to 8,822.46

NYSE Healthcare Sector Index was down 48.87 points (-0.3%) to 18,378.76

UPSIDE MOVERS

(+) BLPH (+190%) Study of hypertension treatment showed improvement

(+) BBI (+73%) Unveils settlement deal with Bodor and equity funding with Lincoln Park Capital fund

(+) WSG (+39%) Reportedly planning a sale of the Ironman Triathlon business

DOWNSIDE MOVERS

(-) FLR (-25%) DelayS 10-K filing amid SEC probe

(-) TWMC (-17%) Announces shareholder approval for the sale of the entertainment segment

(-) TKKS (-18%) Closes Acquisition of Glory Star New Media group

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