U.S. Blacklisting of Chinese Telecom Giant Huawei Drags Down Technology Stocks
The fallout from the blacklisting of Huawei Technologies continued to roil the technology sector and broader stock market. The Nasdaq Composite index was down 1.46 percent while the Dow and S&P 500 indexes fell 0.33 percent and 0.67 percent respectively. The Entrepreneur Index™ lost 0.79 percent today.
U.S. companies are now required to get a license to conduct business with Chinese telecom giant Huawei, one of the biggest buyers of semiconductor chips and other tech gear in the world. Several companies, including Intel and Qualcomm, have suspended business with the Huawei for the time being. The semiconductor chip-makers as a group were hit hard today. Analog Devices (-3.3 percent) and NVIDIA Corp. (-3.05 percent) were both down sharply.
The rest of the tech sector didn't fare much better. All four FAANG stocks on the index were down. Alphabet Inc., which suspended some business with Huawei, was down 2.02 percent and Netflix fell 1.79 percent. Adobe Systems Inc. was also down 1.57 percent.
Tesla's stock continued its free-fall, dropping 2.42 percent today after a Wedbush analyst lowered his price target on the shares. Dan Ives, one of the more bullish analysts on Tesla through the years, thinks the company will face serious issues if it can't return to profitability in the second half of the year.
Tesla just raised $2.4 billion in equity and convertible bonds but Ives thinks it will need another $1-$2 billion if it continues to lose money this year. He said that "robo-taxis and other sci-fi projects" were distracting from the company's most important issue: stoking demand for Tesla's mass-market Model 3 sedan. Tesla shares are down 38.3 percent this year.
Specialty retailer Bed Bath & Beyond fell 3.46 percent -- the biggest decline on the Entrepreneur Index™ today. The company has been under pressure from a trio of activist investors demanding change. Last Monday, long-time CEO Steven Temares resigned from the company and was replaced by recently appointed board member Mary Winston on an interim basis. BBBY shares are up 28 percent this year but down 19.7 percent in the last twelve months.
Other significant losses on the Entrepreneur Index™ were posted by Alexion Pharmaceuticals (-2.8 percent), homebuilder D.R. Horton Inc. (-2.65 percent) and REITs Macerich Company (-2.61 percent) and Simon Property Group (-2.24 percent).
Healthcare IT provider Cerner Corp. and hospital operator Universal Health Services were the only two stocks on the index to gain more than one percent today. Cerner was up 1.56 percent while Universal rose 1.12 percent. Other gains on the index included Cognizant Technology (0.93 percent), Capital One Financial (0.93 percent), Under Armour Inc. (0.68 percent) and Walmart (0.65 percent).
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.