(Reuters) - Weak forecasts from Nvidia and Applied Materials hit chipmakers and dragged the Nasdaq lower on Friday, while the S&P 500 and Dow Industrials were kept afloat by gains in the defensive sectors such as telecoms and consumer staples.
Specialist trader Meric Greenbaum works at his post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 17, 2018. REUTERS/Brendan McDermid
Chipmaker Nvidia (NVDA.O) plunged 4.5 percent, while chip equipment maker Applied Materials (AMAT.O) tumbled 6.7 percent after the current-quarter sales forecasts of the two companies missed Wall Street estimates.
The Philadelphia Semiconductor Index dropped 1.07 percent, falling for the fourth straight session on fears that a two-year chip boom may be losing steam.
The tech sector .SPLRCT pulled back from a drop of as much as 0.7 percent but was down 0.28 percent, the most among the 11 major S&P sectors.
The broader market also pulled back, with seven of the 11 S&P sectors higher. The defensive utilities .SPLRCU, consumer staples .SPLRCS, real estate .SPLRCR and telecom .SPLRCL sectors were up between 0.49 percent and 0.70 percent.
“Today seems more defensive given the run up with had this week,” said William Norris, chief investment officer and head of asset management, CIBC Bank USA.
“Nothing unusual today, as long as the fundamentals remain strong in the U.S. then tech sector should be fine. This is not the beginning of a downturn in the tech sector.”
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