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Wall Street closed in the red on Monday as blacklisting of the Chinese tech behemoth Huawei by the U.S. government hit technology stocks. Several large U.S. tech giants are cancelling licenses that they had given to Huawei for using high-tech U.S. products. All three major stock indexes finished in negative territory.
The Dow Jones Industrial Average (DJI) declined 0.3% to close at 25,679.90. The S&P 500 shaded 0.7% to close at 2,840.23. Meanwhile, the Nasdaq Composite Index closed at 7,702.38, dropping 1.5% or 113.91 points. The fear-gauge CBOE Volatility Index (VIX) increased 2.2% to close at 16.31. A total of 6.4 billion shares were traded on Monday, lower than the last 20-session average of 7.01 billion. Decliners outnumbered advancers on the NYSE by a 2.03-to-1 ratio. On Nasdaq, a 1.81-to-1 ratio favored declining issues.
How Did The Benchmarks Perform?
The Dow closed in negative territory with 20 components of the 30-stock blue-chip index closing in the red while ten finished in the green. The S&P 500 also closed in the red.The Technology Select Sector SPDR (XLK) and Communication Services Select Sector SPDR (XLC) declined 1.7% and 1.6%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in the red while three finished in the green. Moreover, tech-heavy Nasdaq Composite also declined due to weak performance by trade-sensitive large-cap stocks.
U.S. Tech Giants Cancel Huawei Licenses
On May 15, President Donald Trump issued an executive order preventing U.S. corporates engaging in transactions involving information and communications technology that “poses an unacceptable risk to the national security of the United States.”
Following the order, the Department of Commerce added Chinese telecom behemoth Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List. In order to comply with the government decision, several major tech companies including Intel Corp. (INTC - Free Report) , Qualcomm Inc. (QCOM - Free Report) , Xilinx Inc. and Broadcom Inc. (AVGO - Free Report) stopped supplying intermediary inputs to Huawei.
On May 17 CNBC reported that the U.S.-China trade negotiations appear to have stalled. On May18, South China Morning Post reported thatBeijing in no rush for US Treasury Secretary Steven Mnuchin to visit China.
On May 10, the U.S. government hiked existing tariff rates to 25% from 10% on $200 billion of Chinese exports. In 2018, the Trump administration imposed 25% tariff on $50 billion of Chinese goods. Moreover, President Trump threatened to levy 25% tariff on another $325 billion of Chinese goods. China had imposed $110 billion tariffs on U.S. exports in 2018. Following the hike of U.S. tariff, China 25% tariff on an additional $60 billion U.S. goods effective Jun 1, 2019.
Varian Medical Systems Inc. recently entered into a definitive agreement to acquire Cancer Treatment Services International (“CTSI”) for $283 million. (Read More)
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One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
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Stock Market News For May 21, 2019
Wall Street closed in the red on Monday as blacklisting of the Chinese tech behemoth Huawei by the U.S. government hit technology stocks. Several large U.S. tech giants are cancelling licenses that they had given to Huawei for using high-tech U.S. products. All three major stock indexes finished in negative territory.
The Dow Jones Industrial Average (DJI) declined 0.3% to close at 25,679.90. The S&P 500 shaded 0.7% to close at 2,840.23. Meanwhile, the Nasdaq Composite Index closed at 7,702.38, dropping 1.5% or 113.91 points. The fear-gauge CBOE Volatility Index (VIX) increased 2.2% to close at 16.31. A total of 6.4 billion shares were traded on Monday, lower than the last 20-session average of 7.01 billion. Decliners outnumbered advancers on the NYSE by a 2.03-to-1 ratio. On Nasdaq, a 1.81-to-1 ratio favored declining issues.
How Did The Benchmarks Perform?
The Dow closed in negative territory with 20 components of the 30-stock blue-chip index closing in the red while ten finished in the green. The S&P 500 also closed in the red.The Technology Select Sector SPDR (XLK) and Communication Services Select Sector SPDR (XLC) declined 1.7% and 1.6%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in the red while three finished in the green. Moreover, tech-heavy Nasdaq Composite also declined due to weak performance by trade-sensitive large-cap stocks.
U.S. Tech Giants Cancel Huawei Licenses
On May 15, President Donald Trump issued an executive order preventing U.S. corporates engaging in transactions involving information and communications technology that “poses an unacceptable risk to the national security of the United States.”
Following the order, the Department of Commerce added Chinese telecom behemoth Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List. In order to comply with the government decision, several major tech companies including Intel Corp. (INTC - Free Report) , Qualcomm Inc. (QCOM - Free Report) , Xilinx Inc. and Broadcom Inc. (AVGO - Free Report) stopped supplying intermediary inputs to Huawei.
Consequently, shares of Intel, Qualcomm, Xilinx and Broadcom plunged 3%, 6%, 3.6% and 6%, respectively. Xilinx carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
U.S. – China Trade Negotiations Halts
On May 17 CNBC reported that the U.S.-China trade negotiations appear to have stalled. On May18, South China Morning Post reported thatBeijing in no rush for US Treasury Secretary Steven Mnuchin to visit China.
On May 10, the U.S. government hiked existing tariff rates to 25% from 10% on $200 billion of Chinese exports. In 2018, the Trump administration imposed 25% tariff on $50 billion of Chinese goods. Moreover, President Trump threatened to levy 25% tariff on another $325 billion of Chinese goods. China had imposed $110 billion tariffs on U.S. exports in 2018. Following the hike of U.S. tariff, China 25% tariff on an additional $60 billion U.S. goods effective Jun 1, 2019.
Stocks That Made Headline
Varian Medical's CTSI Buyout to Boost Oncology Services Unit
Varian Medical Systems Inc. recently entered into a definitive agreement to acquire Cancer Treatment Services International (“CTSI”) for $283 million. (Read More)
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Click to get it free >>