S&P 500 Climbs as Rising Consumer Stocks Offset Chip-Led Dent in Tech
2022.07.02 01:20
By Yasin Ebrahim
Investing.com — The S&P 500 cut losses to climb higher Friday, as a jump in consumer stocks offset a chip-led dip in tech following weaker guidance from chipmaker Micron.
The S&P 500 rose 0.3%, the Dow Jones Industrial Average gained 0.3%, or 105 points, the Nasdaq was up 0.1%
A more than 1% rise in consumer stocks helped the broader market turn positive after homebuilders surged as investors price in a less aggressive Fed rate hike in July.
PulteGroup Inc (NYSE:PHM), Lennar Corporation (NYSE:LEN), and DR Horton Inc (NYSE:DHI) were up sharply.
Tech, meanwhile, was held back by a slide in chip stocks as weaker-than-expected guidance from Micron weighed on sentiment.
Micron Technology (NASDAQ:MU) fell 3% after the chipmaker guided fiscal fourth-quarter sales below Wall Street estimates on signs of softening demand.
“Micron’s sharply reduced guidance for FQ4 that assumes both bit and ASP (average selling price) declines in DRAM and NAND due to deteriorating end markets in what is typically a seasonally stronger period,” Wedbush said as it cut its price target on the chipmaker’s stock to $85 from $120.
The softer guidance triggered selling pressure across chip stocks. Advanced Micro Devices (NASDAQ:AMD), NVIDIA (NASDAQ:NVDA), and Texas Instruments Incorporated (NASDAQ:TXN) fell 4%.
As well as a fall in chip stocks, weakness in Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) also weighed on tech, with the latter reportedly set to trim hiring plans as economic recession fears mount.
The bond market was also dominating investor attention as Treasury yields continued to slip after data showed a further deterioration in the economy.
Manufacturing activity in May fell to a reading of 53.0, missing the consensus estimate of 54.9, marking the first decline since September.
Kohl’s (NYSE:KSS) said that Vitamin Shoppe had ended its takeover pursuit of the grocery chain following a weaker retail and financial environment. Its shares are more than 15% lower.
Boeing (NYSE:BA) shrugged off earlier losses to trade 2% higher even as rival Airbus secured orders for 300 jets from China’s three biggest state-owned airlines at a time when Boeing’s 737 MAX jets are yet to resume commercial flights in the country.
In other news, General Motors (NYSE:GM) rose more than 1% after reporting a fall in quarterly sales and warning of delays to deliveries as supply-chain issues continue to weigh. The automaker, however, kept its guidance for the year unchanged.
