Chip stocks continued their broad selloff Thursday, as investors feared that the U.S.-China trade war will last longer (Advanced Micro Devices Inc. (AMD) slid 3.6%, Micron Technology Inc. (MU) dropped 3.5%, Nvidia Corp. (NVDA) gave up 3.5% and Qualcomm Inc. (QCOM) shed 3.4%. The lone gainer was Cypress Semiconductor Corp.'s stock, which tacked on 0.5%. Analyst Vivek Arya at Bank of America Merrill Lynch said chip companies appear to be expecting some trade resolution by the third quarter, soon after President Trump meets with China's president Xi Jinping on June 28 to June 29. "Overall, we believe the U.S. holds significant leverage in the current trade war (semis perspective), and can continue to exert even more pressure (restrict additional Chinese customers) which should lead to some resolution," Arya wrote in a note to clients.) than previously expected. The PHLX Semiconductor Index slumped 2.2% in morning trade, with 29 of 30 components losing ground, as the S&P 500 declined 1.2%. The SOX, which has now shed 15.5% this month, has dropped below the 200-day moving average, which is widely followed as a tracker of longer-term trends, and is now in danger of the first close below that technical indicator since Feb. 4. Among the SOX's biggest decliners, shares of
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
May 23, 2019 10:41 ET (14:41 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.