Tech rebound props up Wall Street, but global growth concerns weigh

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October 10, 2018
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October 11, 2018

Tech rebound props up Wall Street, but global growth concerns weigh

(Reuters) – The S&P 500 and the Nasdaq rose on Tuesday, boosted by a rebound in technology stocks, but gains, including on the blue-chip Dow Jones Industrial Average, were kept in check by concerns on slowing global growth.

The International Monetary Fund lowered its global economic growth forecasts for 2018 and 2019, and its 2019 estimates for U.S. and China, saying the two countries would feel most of the impact of their trade war next year.

That pushed the trade-sensitive industrials sector .SPLRCI down 0.62 percent, with Boeing (BA.N) falling more than 1 percent and Caterpillar (CAT.N) down over 2 percent.

“IMF’s downgrade just goes to show how the tariff dispute between U.S. and China is beginning to take its toll on the global economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

But, defying the much steeper losses that stock futures were pointing towards, eight of the 11 major S&P sectors were in positive territory.

The heavyweight technology sector .SPLRCT rose 0.36 percent, with gains in Microsoft (MSFT.O) and other software companies more than offsetting a drop in chipmakers, who count Chinese companies among their main clients.

The communication services group .SPLRCL gained 0.26 percent, with Facebook’s (FB.O) 1.8 percent gain helping offset a roughly 1 percent drop in Alphabet (GOOGL.O).

Alphabet continued its losses from Monday when it said it would shut down its social network Google+ and tighten its data sharing policies after finding that private profile data of at least 500,000 users may have been exposed to hundreds of external developers.

At 10:20 a.m. ET the Dow Jones Industrial Average .DJI was down 20.80 points, or 0.08 percent, at 26,465.98, the S&P 500 .SPX was up 2.78 points, or 0.10 percent, at 2,887.21 and the Nasdaq Composite .IXIC was up 30.08 points, or 0.39 percent, at 7,766.03.

The materials index .SPLRCM slid 1.66 percent, weighed down by a drop in chemical companies after PPG’s results and paper packaging companies following BMO’s negative comments on capacity and stock valuations.

PPG Industries (PPG.N) tumbled 7.8 percent, the most on the S&P, after the specialty chemicals maker said its current-quarter profit would be hit by higher raw material costs.

Energy stocks .SPNY were up 0.34 percent as oil prices rose on growing evidence of falling Iranian crude exports.

Advancing issues outnumbered decliners for a 1.09-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and 22 new lows, while the Nasdaq recorded 6 new highs and 51 new lows.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta