October 24, 2018 / 3:41 PM / 10 months ago

US STOCKS-Chipmakers lead Wall St lower as concerns over China impact grow

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* Weak Texas Instruments, STMicro outlook hit chipmakers

* AT&T drops on profit miss due to satellite TV business

* Microsoft, AMD, Ford, drop ahead of results after the bell

* Boeing rises after raising profit forecast

* Indexes drop: Dow 1.00 pct, S&P 1.20 pct, Nasdaq 1.61 pct (Updates prices to late morning, changes comment)

By Amy Caren Daniel

Oct 24 (Reuters) - U.S. stocks dropped on Wednesday as weak results from AT&T and sour outlook from chipmakers ahead of key earnings added to growing worries about corporate profit growth and overshadowed optimism from Boeing’s raised forecast.

A slew of results this week is expected to throw spotlight on the risk of a slowdown in China, the world’s No. 2 economy, spilling beyond its borders and eating into U.S. corporate profits.

“The biggest theme is the trade front and what’s going on with China’s slowdown ... because it’s such a big demand space for a lot of industrial and tech companies,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.

“Right now with earnings season going on ... there’s plenty to focus on that can give you an idea on what China is doing and what impact tariffs are having on a lot of these companies.”

Chipmakers, already struggling with oversupply and reliant on China for a significant portion of profit, dropped after Texas Instruments forecast weak current quarter and STMicroelectronics signaled slowing demand in China.

Texas Instruments dropped 4.9 percent, helping pull the Philadelphia SE Semiconductor index down 3.63 percent. Advanced Micro Devices, which reports results after the bell, fell 6.1 percent and Intel, reporting on Thursday, dropped 2.3 percent.

The beaten-down S&P technology sector retreated 1.86 percent. Microsoft, which reports after the bell, fell 2.2 percent.

AT&T tumbled 6.6 percent after U.S. wireless carrier’s quarterly profit rose less than expected, held back by its declining satellite TV business.

That weighed on shares of other media companies, with the communications services sector sliding 2.32 percent, the most among the 11 major S&P sectors.

Boeing, the single largest U.S. exporter to China, rose 1.1 percent after the planemaker raised its full-year expectations. That helped keep the Dow Jones Industrial Average open higher, before the mood soured.

At 11:20 a.m. EDT the Dow was down 251.89 points, or 1.00 percent, at 24,939.54, the S&P 500 was down 32.76 points, or 1.20 percent, at 2,707.93 and the Nasdaq Composite was down 119.68 points, or 1.61 percent, at 7,317.86.

Only the defensive utilities, real estate and consumer staples posted gains among the 11 major indexes.

While earnings from S&P 500 companies are expected to have increased about 22 percent in the third quarter, 2018 is seen as a peak for the profit cycle, according to Refinitiv data.

United Parcel Service dropped 3.5 percent after the company said changing U.S. trade policies weighed on international results.

Ford, due to report after the closing bell, fell 3.1 percent.

Declining issues outnumbered advancers for a 1.73-to-1 ratio on the NYSE and a 2.36-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 31 new lows, while the Nasdaq recorded 11 new highs and 204 new lows. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur)

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