Wall Street slips as bond yields climb; Broadcom surges
Broadcom jumps as it forecasts Q1 revenue above estimates
S&P, Dow set for weekly declines, Nasdaq on track for gains
Indexes down: Dow 0.09%, S&P 500 0.04%, Nasdaq 0.01%
Updates with midsession trading
By Echo Wang
Dec 13 (Reuters) -Wall Street's main indexes edged lower on Friday as rising government bond yields weighed on investor sentiment, while an optimistic forecast from Broadcom helped sustain enthusiasm around artificial intelligence.
Broadcom AVGO.O forecast quarterly revenue surpassing Wall Street expectations and predicted robust growth in demand for its custom AI chips over the next few years. The optimistic outlook propelled the company’s shares nearly 20% higher, pushing its market capitalization past $1 trillion for the first time.
Chip stocks were mixed, with Broadcom rival Marvell Technology MRVL.O rising 9.4%, while AI bellwether Nvidia NVDA.O reversed gains and was last down 2.5%. But a gauge for semiconductor stocks .SOX added 2.5%.
Yields on U.S. Treasuries rose across the board, with ones on the benchmark 10-year bond US10YT=RR hitting a three-week high.
“Right now the interest rate selloff is winning,” Said Jay Hatfield, chief executive officer at Infrastructure Capital Management in New York, “It's pretty natural for value and income stocks to go down when tech stocks are rising.”
Technology stocks continued their upward momentum, driving the Nasdaq above the 20,000 mark for the first time on Wednesday. The rally was further bolstered by an in-line inflation report, which solidified expectations for a 25 basis-point interest rate cut from the Federal Reserve in its meeting next week.
Trader bets on the cut at the central bank's Dec. 17-18 meeting stand at near 97%, according to CME's FedWatch Tool. However, they indicate chances of a pause in January.
At 1:42 p.m. EST the Dow Jones Industrial Average .DJI fell 40.91 points, or 0.09%, to 43,873.21, the S&P 500 .SPX lost 2.58 points, or 0.04%, to 6,048.67 and the Nasdaq Composite .IXIC lost 2.86 points, or 0.01%, to 19,899.98.
Wall Street had taken a breather in the previous session after recent gains and some hot economic data ahead of the Fed's meeting, setting up the benchmark S&P 500 and the Dow for weekly losses. However, the Nasdaq was on track to end the week higher.
U.S. stocks have repeatedly reached all-time highs this year, driven by surging interest in heavyweight tech companies capitalizing on artificial-intelligence trends.
Investor sentiment also received a boost following Donald Trump’s presidential election victory, as markets anticipate his pro-business policies could enhance corporate profitability.
Among other movers, RH RH.N jumped 14% after the home furnishings retailer reported higher net revenue for the third quarter, while D.R. Horton DHI.N eased 2.1% as J.P. Morgan downgraded its rating on the homebuilder to "underweight."
Declining issues outnumbered advancers by a 2.64-to-1 ratio on the NYSE. There were 76 new highs and 124 new lows on the NYSE.
The S&P 500 posted 8 new 52-week highs and 15 new lows while the Nasdaq Composite recorded 62 new highs and 186 new lows.
Broadcom revenue https://reut.rs/3ZRtsh0
Most S&P 500 sectors set for weekly losses https://tmsnrt.rs/3BnGklv
Reporting by Echo Wang in New York
Additional reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru
Editing by Maju Samuel and Matthew Lewis
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