Technology shares have pulled Wall Street lower after an unexpected drop in China’s exports in December reignited worries of a slowdown in global economic growth.
The China trade data reinforced concerns that US tariffs on Chinese goods were taking a toll on the world’s second-largest economy, prompting companies such as Apple to issue a profit warning. Chipmakers, which get a sizeable portion of their revenue from China, took a hit, with the Philadelphia SE semiconductor index slipping 1.60 per cent. Trade-sensitive Boeing and Caterpillar fell more than 1 per cent.
Citigroup shares reversed course to rise 3 per cent despite reporting lower-than-expected revenue after chief financial officer John Gerspach said the slowdown in China was not particularly disruptive to its global operations and that the bank saw improvements in trading conditions in the first few days of the quarter. Citigroup kicked off fourth-quarter earnings season for large US banks, with JPMorgan Chase and Wells Fargo set to report earnings on Tuesday.
Ten of the 11 major S&P sectors were lower, with the technology sector’s 0.87 per cent fall being the biggest drag on the S&P 500. The S&P financial sector was the only gainer, lifting US stocks off their early lows. A recent rally in stocks, fuelled by US-China trade optimism and hopes of a slow pace of interest rate hikes, has driven a 10 per cent gain in the S&P 500 from its Christmas Eve low. The benchmark index is about 12 per cent away from its September 20 record close.
The Dow Jones Industrial Average was down 86.11 points, or 0.36 per cent, at 23,909.84, the S&P 500 was down 13.65 points, or 0.53 per cent, at 2,582.61 and the Nasdaq Composite was down 65.56 points, or 0.94 per cent, at 6,905.91. Adding to the downbeat mood was a partial government shutdown, which entered its 24th day, making it the longest shuttering of federal agencies in US history.
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