Stocks slide broadly, led down by technology shares

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

The U.S. decision to ban technology sales to China’s Huawei hammered the tech sector, particularly chipmakers. About one-third of Huawei’s suppliers are American chipmakers, and investors are worried that the action against Huawei could crimp sales for companies with revenue heavily tied to China.

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 Huawei ban is adding more anxiety to a market worried about further escalations in the trade war between the U.S. and China. Both sides have recently gone back and forth raising additional tariffs on each other’s goods. The uncertainty has put a dent in investor confidence over how Washington and Beijing will resolve their dispute, pulling stocks lower the last two weeks.

“The news that has filtered out of the [Trump] administration is that talks have stalled,” said Quincy Krosby, chief market strategist at Prudential Financial. “Nonetheless, the market has held up fairly well given the desire by the market to see a deal consummated.”

The Standard & Poor’s 500 index 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 dropped 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% late 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, 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 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 effect of tariffs. HSBC noted that Apple could be forced to raise prices, which could hurt demand.

Other technology companies also took losses. Alphabet, 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%.

American Airlines had the steepest decline among major airlines after Morgan Stanley warned that it faces higher labor costs on top of higher fuel costs. The stock slid 2.5%.

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

The chairman of the Federal Communications Commission said Monday he plans to recommend approval of the deal. The full commission must still vote, and the Justice Department must also clear the deal.

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 for the electric car maker’s Model 3, which could make it harder for the company to turn a profit in the next couple of quarters and beyond.

Tesla shares are down 50% since September. The company lost $702.1 million in the first quarter, among its worst quarters in two years, as sales tumbled 31%. Chief Executive Elon Musk predicted another loss in the second quarter but said Tesla would be profitable again by the third quarter.

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

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

Gold rose 0.1% to $1,277.30 an ounce, silver added 0.4% to $14.45 an ounce and copper gave up 0.5% to $2.73 a pound.

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