REUTERS – Wall Street opened lower on Thursday as Apple weighed on the major indexes and Celgene led a fall in biotech stocks, more than offsetting encouraging economic data.
All the 10 major S&P sectors were down, with the technology index retreating 1.1 percent. The Nasdaq biotech index dropped 1.7 percent.
Apple fell 2.3 percent to $125.70 and was the biggest drag on the Dow, S&P 500 and the Nasdaq. The company limited availability of the Apple Watch after a key component supplied by a Chinese company was found to be defective, according to the Wall Street Journal.
Equity markets were weak despite the release of encouraging economic data earlier in the day.
The number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week and consumer spending rose in March, signs the economy was regaining momentum after stumbling badly in the first quarter.
“I think we’re going to see cleaner data come out in the second quarter and with the jobless claims being at their lowest levels in 15 years, that certainly points towards a strengthening labor market which has been a clear focus point of the Fed,” said Mark Luschini, chief market strategist at Janney Montgomery Scott in Philadelphia.
At 10:30 a.m. EDT (1430 GMT) the Dow Jones industrial average was down 123.88 points, or 0.69 percent, at 17,911.65, the S&P 500 was down 14.73 points, or 0.7 percent, at 2,092.12 and the Nasdaq Composite was down 47.89 points, or 0.95 percent, at 4,975.75.
Celgene fell 3.4 percent to $109.39 and was the biggest drag on biotech stocks after the biotechnology company blamed the dollar for its lower-than-expected quarterly revenue. The stock was the second biggest drag on the S&P 500 and the Nasdaq.
Baidu declined 5.9 percent to $206 after China’s dominant Internet search engine provider posted its slowest quarterly revenue growth rate in almost seven years.
Companies continue to cite the strong dollar, which has climbed nearly 9 percent against a basket of major currencies from January to March, for weak results and forecasts.
Colgate-Palmolive fell 1.9 percent to $67.17 after cutting its full-year profit forecast for the second time, saying the impact of the dollar would worsen.
Automotive supplier BorgWarner also cited the dollar for a fall in quarterly revenue. Its stock dropped 4.2 percent to $58.35.
ConocoPhillips fell 0.62 percent to $67.94 after it reported a sharp fall in quarterly profit, hurt by a steep decline in crude oil prices.
Yelp shares slumped 18.1 percent to $42.00 a day after the operator of consumer review website forecast second-quarter revenue below analysts’ expectations.
Earnings expected after the close on Thursday include Dow component Visa, insurer AIG and LinkedIn.
Declining issues outnumbered advancing ones on the NYSE by 2,348 to 524, for a 4.48-to-1 ratio on the downside; on the Nasdaq, 1,948 issues fell and 557 advanced for a 3.50-to-1 ratio favoring decliners.
(Editing by Savio D’Souza)
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