Stocks Fall as Huawei Ban Prompts Sell-Off in Chipmakers

NEW YORK (AP) -

Chipmakers and other technology companies pulled U.S. stocks lower Monday, extending the market’s losses.

The U.S. decision to ban technology sales to China’s Huawei hammered the tech sector, particularly chipmakers.

Apple also skidded after an analyst warned that the iPhone maker’s growth prospects could dim as the U.S. and China continue to spar over trade.

The S&P 500 has fallen 3.6% so far this month, taking a bit of the shine off a stellar start to the year. The index is still up 13.3% year to date.

On Monday, the S&P 500 lost 19.30 points, or 0.7%, to 2,840.23.

The Dow Jones Industrial Average fell 84.10 points, or 0.3%, to 25,679.90. Apple was the biggest drag on the Dow.

The technology heavy Nasdaq composite slid 113.91 points, or 1.5%, to 7,702.38. The Russell 2000 index of small company stocks gave up 10.80 points, or 0.7%, to 1,524.96.

Major stock indexes in Europe closed broadly lower.

Bond prices fell. The yield on the 10-year Treasury rose to 2.42% from 2.39% Friday.

Chipmakers led the way lower Monday as traders weighed the implications from the U.S. ban on technology sales to Huawei.

The U.S. government says that Chinese suppliers, including Huawei and its smaller rival, ZTE Corp., pose an espionage threat because they are beholden to China’s ruling Communist Party.

Qualcomm, which gets about 65% of its revenue from China, slumped 6%. Broadcom, which gets nearly half of its revenue from China, also fell 6%. Intel dropped 3% and Xilinx slid 3.6%. An S&P index that measures the performance of chip and chip equipment makers fell nearly 4%.

Apple fell 3.1% after analysts at HSBC cut their price target on the stock, citing renewed risk in the company’s growth prospects in China and the potential impact from tariffs.

Other technology companies also took losses. Alphabet Inc., Google’s parent company, slid 2.1% after it indicated that it would have to cut some features on Huawei smartphones. Other communications stocks also fell. Facebook dropped 1.4% and Comcast gave up 1.7%.

Traders bid up shares in T-Mobile and Sprint, betting that the telecom companies could be closer to completing their $26.5 billion merger. T-Mobile climbed 3.9% and Sprint surged 18.8%.

Tesla fell 2.7% after an analyst at WedBush said there seems to be mixed signals on demand for the electric car maker’s Model 3, which could make it harder for the firm to turn a profit in the future.

Tesla shares are down 50 percent since September. The company lost $702.1 million in the first quarter, among its worst quarters in two years, as sales tumbled 31%.

Energy futures finished mixed. Benchmark U.S. crude gained 0.5% to settle at $63.10 per barrel. Brent crude, the international standard, closed 0.3% lower at $71.97 per barrel.

Wholesale gasoline dropped 1.8% to $2.01 per gallon. Heating oil fell 1% to $2.07 per gallon. Natural gas gained 1.6% to $2.67 per 1,000 cubic feet.

Gold inched 0.1% higher to $1,277.30 per ounce, silver added 0.4% to $14.45 per ounce and copper gave up 0.5% to $2.73 per pound.

The dollar fell to 109.96 Japanese yen from 110.11 yen on Friday. The euro strengthened to $1.1168 from $1.1160.