Wall Street ends down, in the wake of Cisco and Apple

by Devik Jain and Noel Randewich

May 19 (Reuters) – The New York Stock Exchange ended a mixed session on Thursday as Cisco Systems plunged after lowering its forecast, while investors remained concerned by inflation and rising interest rates.

The Dow Jones index fell 0.75% to 31,253.13 points.

The broader S&P-500 fell 0.58% to 3,900.79 points.

The Nasdaq Composite fell for its part by 0.26% to 11,388.50 points.

Cisco plunged 13.7% after lowering its full-year revenue growth forecast, citing its exit from Russia and component shortages due to China’s COVID-19 containment measures.

Apple and chipmaker Broadcom fell 2.5% and 4.3% respectively and weighed on the S&P-500.

“The reality is that inflation is high and interest rates are rising,” said Terry Sandven, chief strategist at US Bank Wealth Management in Minneapolis, Minnesota.

“Until the rate of inflation starts to slow, we will have increased volatility, and we believe that will continue for most of the summer months,” he added.

Twitter rose 1.2% after a Bloomberg reporter reported that social network executives informed staff that Elon Musk’s $44 billion takeover would be finalized, with no renegotiation of the amount.

Distributor Kohl’s, also impacted by soaring inflation to a four-decade peak, has revised down its forecast for annual sales. However, in the aftermath of its 11% drop in the wake of Target results, its stock rebounded more than 4%.

Amid geopolitical uncertainties, inflation and US Federal Reserve (Fed) monetary policy tightening, the S&P-500 tumbled about 18% from its January 3 closing record.

Goldman Sachs strategists predict a 35% chance that the US economy will enter a recession over the next two years.

Struggling since the start of the year, some high-growth stocks posted gains and helped keep the Nasdaq in the green.

Nvidia rose 2.9%, while Amazon and Tesla were up around 1%.

(French version Jean Terzian)

Source link -91