Wall Street drops as tech stocks, Nike weigh

Wall Street drops as tech stocks, Nike weigh

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(Reuters) – U.S. stocks tumbled on Tuesday as a drop in heavyweights Facebook and Nike added to worries over trade negotiations between the United States and other major economies.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 31, 2018. REUTERS/Brendan McDermid

Nike (NKE.N) dropped 2.1 percent, top drag on the Dow Jones Industrial Average .DJI, as calls for a boycott of the sportswear giant gained traction on social media after it chose Colin Kaepernick as a face for adverts marking the 30th anniversary of its “Just Do It” slogan.

Facebook (FB.O) fell 3 percent after brokerage MoffettNathanson downgraded the social media giant to “neutral” from “buy” citing revenue growth deceleration.

The S&P technology index .SPLRCT fell 0.7 percent, on track to post its biggest loss since Aug. 15.

“This has more to do with the fact that the markets have had a strong run in the past two to three weeks and it is normal for people to take a little bit of profits off the table,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

Investors are cautious as a fresh round of U.S tariffs on $200 billion worth of Chinese goods are expected to take effect after a public comment period ends on Sept. 5.

Talks between Canada and the United States to renegotiate the North American Free Trade Agreement (NAFTA) ended on a sour note on Friday, but officials set plans to resume their talks on Wednesday.

Despite the looming tariff threats and trade uncertainties, the major U.S. indexes closed higher in August, with the Nasdaq posting its largest monthly gain since January.

However, traders are cautious about September.

“Some of the largest slips tend to take place during September. Although the economy is still quite strong and stocks are marking hew highs, this doesn’t mean some usual September volatility is out of the question,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

Nine of the 11 major S&P 500 sectors were lower, led by a 1.12 percent drop in the telecom sector .SPLRCL.

Verizon (VZ.N) fell 1.9 percent after Barclays downgraded the wireless carrier’s stock.

At 10:06 a.m. ET the Dow Jones Industrial Average .DJI was down 108.52 points, or 0.42 percent, at 25,856.30, the S&P 500 .SPX was down 8.61 points, or 0.30 percent, at 2,892.91 and the Nasdaq Composite .IXIC was down 39.01 points, or 0.48 percent, at 8,070.53.

Advanced Micro Devices (AMD.O) gained 5.2 percent and Qualcomm (QCOM.O) was up 1.8 percent after brokerages upgraded the chip stocks.

The energy sector .SPNY gained 0.4 percent as oil prices rose after the evacuation of two Gulf of Mexico oil platforms ahead of the approach of Gordon, which is expected to come ashore as a hurricane.

Declining issues outnumbered advancers for a 1.79-to-1 ratio on the NYSE and a 1.92-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and six new lows, while the Nasdaq recorded 82 new highs and 27 new lows.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta

Our Standards:The Thomson Reuters Trust Principles.

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