(Reuters) – U.S. stocks were set to fall for the second straight day on Friday as friction between United States and China and fears over rising U.S. COVID-19 cases dampened demand for risky assets.

Shares of Intel Corp (INTC.O) tumbled 16%, weighing the most on all three indexes after the company said it was six months behind schedule in developing next-generation, power-efficient chip technology and that it would consider farming out more work to outside semiconductor foundries.

Rival Advanced Micro Devices Inc (AMD.O) gained 14.6%, but the broader Philadelphia semiconductor index .SOX dropped 1.1%.

Shares of U.S. drugmakers fell ahead of executive orders by President Donald Trump aimed at lowering drug prices.

The healthcare index .SPXHC shed 1.4%.

The S&P 500 and the Dow are set to clock in their first weekly decline in four as investors feared that the COVID-19 health crisis that has spiraled in recent weeks and has infected over 4 million Americans, could hamper a recovery in economic activity.

Optimism about a potential coronavirus vaccine and fiscal stimulus package had helped the benchmark S&P 500 hit a five-month high earlier this week.

“U.S. equities are in consolidation mode for a good reason. We’ve seen a strong performance in the last three months,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.

“When you look further into the second half of the year, there’s reason to expect some volatility in the broad market … the duration and impact of COVID-19 is still unknown.”

Latest survey showed U.S. business activity increased to a six-month high in July, but companies reported a drop in new orders as a resurgence in new COVID-19 cases weighed on demand.

Sentiment took a hit earlier in the day after Beijing ordered Washington to close its consulate in the city of Chengdu, days after U.S. ordered the closure of the Chinese consulate in Houston.

At 12:43 p.m. ET, the Dow Jones Industrial Average .DJI was down 159.53 points, or 0.60%, at 26,492.80 and the S&P 500 .SPX was down 24.03 points, or 0.74%, at 3,211.63. The Nasdaq Composite .IXIC was down 118.90 points, or 1.14%, at 10,342.51.

Of the 113 S&P 500 companies that have reported quarterly results, 80.5% of them have beaten dramatically lowered profit estimates, according to IBES Refinitiv data.

Oilfield services giant Schlumberger NV (SLB.N) dropped 1.6% as it outlined plans for deeper spending cuts after recording a $3.7 billion charge and a second straight quarterly loss.

American Express Co (AXP.N) slipped 0.2% after it reported an 85% slump in quarterly profit as credit card spending collapsed.

Declining issues outnumbered advancers for a 1.70-to-1 ratio on the NYSE and for a 2.33-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 19 new highs and 17 new lows.

Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Amazon envisions new palm reading tech in stadiums, offices

SEATTLE — Amazon has introduced new palm reading technology in a pair of Seattle stores and sees broader uses in places like stadiums and offices. Customers at the stores near Amazon‘s campus in Washington can flash a palm for entry…

Overpriced US stocks ‘nightmare’ driven by ‘young & dumb investors’ – fund manager

“The buying that went on in August and September is a 10-year phenomenon the likes of which we have never seen among millennials, and in the risk-taking among people that don’t want to own bonds and want to own overpriced…

Exclusive: Sinclair Oil weighs offers for company sale: sources

NEW YORK (Reuters) – Sinclair Oil Corp, which operates two Wyoming refineries and has licensed more than 1,000 branded gasoline stations, is reviewing offers to buy the company, according to three people familiar with the matter. A Sinclair sale could…

Boeing supplier furloughs 2,300 employees on closure of Boeing facilities amid COVID-19

(Reuters) – U.S. aero parts maker Triumph Group Inc (TGI.N) said it was furloughing about 2,300 employees across its U.S. and European plants for two to four weeks to cut capacity linked to Boeing (BA.N) commercial aircraft programs amid the…