Wall Street hit by tech, oil weakness

(Reuters) – U.S. stock indexes fell on Friday, with Apple leading declines in the technology sector and as energy companies took a hit from lower oil prices after President Donald Trump’s criticism on OPEC.

Traders work on the floor of the New York Stock Exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., April 19, 2018. REUTERS/Brendan McDermid

Apple (AAPL.O) fell 3.4 percent and was the biggest drag on the major indexes. Morgan Stanley estimated weak demand for its latest iPhones, adding to fears raised by Taiwan Semiconductor (2330.TW) of softer smartphone sales.

Oil prices were down about half a percent after Trump criticized OPEC for output reductions that have helped raise oil prices and said the action would not be tolerated. [O/R]

The S&P energy index .SPNY fell 1 percent, while the technology index .SPLRCT was weak for the third session in a row, dropping 1.4 percent.

Schlumberger (SLB.N) dropped 1.5 percent after the oilfield services provider’s profit just scraped past estimates. Rival Halliburton (HAL.N) fell 0.3 percent.

Oil majors Exxon (XOM.N) and Chevron (CVX.N) were off more than 1 percent and weighed on the Dow Jones Industrial Average.

The Dow, however, got a boost from General Electric (GE.N), which jumped 3.6 percent after it posted quarterly results that topped estimates and affirmed its 2018 forecasts.

First-quarter profit at S&P 500 companies are expected to have recorded their strongest gain in seven years. Of the 87 companies that have reported so far, 79.3 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.

“Earnings have been good, beating expectations, and those were already elevated expectations,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co.

However, Schutte said rising interest rates will weaken equity markets and cause short-term corrections.

“But it’s resolved if economic growth keeps going higher and pulls the equity market with it.”

The 10-year Treasury yield, the benchmark for global borrowing costs, reached its highest level since March 21 as a bond selloff continued for a second day, driving the yield curve steeper after two weeks of flattening. [US/]

At 11:18 a.m. EDT the Dow Jones Industrial Average .DJI was down 208.23 points, or 0.84 percent, at 24,456.66, the S&P 500 .SPX was down 20.74 points, or 0.77 percent, at 2,672.39 and the Nasdaq Composite .IXIC was down 76.01 points, or 1.05 percent, at 7,162.05.

Skechers USA (SKX.N) shares tumbled 28.6 percent after the footwear maker’s quarterly profit forecast missed analysts’ estimates.

Declining issues outnumbered advancers by a 2.87-to-1 ratio on the NYSE and by a 2.10-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and 17 new lows, while the Nasdaq recorded 41 new highs and 35 new lows.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

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