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US STOCKS-Wall Street drops as trade tensions spike

Published 20/09/2019, 19:13
© Reuters.  US STOCKS-Wall Street drops as trade tensions spike
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* China delegates scrap U.S. farm visit, indexes fall

* Trade-sensitive tech sector drops

* Netflix drags after CEO comments

* Indexes fall: Dow 0.47%, S&P 0.51%, Nasdaq 1.01%

(Updates to midday)

By Ambar Warrick and Medha Singh

Sept 20 (Reuters) - The Wall Street's main indexes dropped

on Friday, after the Montana Farm Bureau said Chinese

agriculture officials who were due to visit U.S. farm states

next week canceled their trip, dampening optimism on U.S.-China

trade talks.

The cancellation came as trade talks were held in Washington

and U.S. President Donald Trump said he wanted a complete trade

deal with the Asian nation, not just an agreement for China to

buy more U.S. agricultural goods. "It's trade related and markets are just hyper-sensitive to

trade," said Paul Nolte, portfolio manager at Kingsview Asset

Management in Chicago.

Recent signs of easing trade worries had supported the

markets, bringing the S&P 500 .SPX just shy of its all-time

high hit in July. Now it stands 1.2% away from that level.

Seven of the 11 major S&P sectors were lower with

tariff-sensitive technology stocks .SPLRCT losing the most,

down 1.27%. The Philadelphia chip index .SOX fell 1.67%.

"It doesn't look like China would be openly willing to give

concessions that the United States is looking for unless ...

there is some indication from the U.S. that there is some

interest in taking those tariffs off," said Liz Ann Sonders,

chief investment strategist at Charles Schwab.

At 1:49 p.m. ET, the Dow Jones Industrial Average .DJI was

down 128.44 points, or 0.47%, at 26,966.35, the S&P 500 .SPX

was down 15.33 points, or 0.51%, at 2,991.46. The Nasdaq

Composite .IXIC was down 82.67 points, or 1.01%, at 8,100.21.

Before news of the farm visit cancellation broke, the S&P

500 and Dow Industrials were edging higher, supported by gains

in healthcare stocks .SPXHC , while a drop in shares of Netflix

Inc .NFLX kept the Nasdaq .IXIC firmly in the red.

Netflix slipped 7% after CEO Reed Hastings' comments

underscored growing costs and rising competition from Walt

Disney Co DIS.N , Apple Inc AAPL.O and other video streaming

services. Adding to Netflix's woes, Evercore ISI said recent data

painted an uncertain picture of the company's international

subscriber growth.

The S&P 500 healthcare index .SPXHC , which has been the

worst performing S&P sector this year, clocked the biggest gain

among the 11 major sectors.

Merck & Co MRK.N gained 1.5% as the company's drugs

Pifeltro and Delstrigo received FDA approval for use in certain

adult patients with HIV-1 who are "virally suppressed".

Roku Inc ROKU.O tumbled 21.7% after Pivotal Research

started coverage of its shares with a "sell" rating.

Chipmaker Xilinx Inc XLNX.O dropped 6.8% as Chief

Financial Officer Lorenzo Flores said he would step down,

prompting Bank of America Merrill to downgrade its stock to

"neutral".

Markets are likely to be volatile towards the end of the

session due to "quadruple witching", where investors unwind

positions in futures and options contracts before they expire.

Advancing issues outnumbered decliners for a 1.02-to-1 ratio

on the NYSE. Declining issues outnumbered advancers for a

1.32-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and no new low,

while the Nasdaq recorded 30 new highs and 36 new lows.

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