Wall Street edges up, Nvidia drops after CEO resigns
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NEW YORK/LONDON, Nov 12 : US stocks reversed early losses to trade slightly higher on Thursday even as Nvidia shares fell following CEO Jensen Huang's resignation. The 10-year US Treasury yield climbed back above 5 per cent.
Nvidia said Chief Financial Officer Colette Kress will serve as interim CEO as the company looks for a permanent successor. Nvidia shares were last down about 4 per cent but off the day's lows.
Huang's resignation raises questions about the chipmaker's future and the AI boom. The move follows news Huang had an affair with a Chinese businesswoman whom US authorities suspect of spying for Beijing.
Shares of competitor Advanced Micro Devices were up 7 per cent. Broadcom rose 5.4 per cent, while Intel was flat.
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Chinese tech firms that use Nvidia chips for their AI models fell sharply. Alibaba was down 7.1 per cent in US trading, while Tencent dropped 2.6 per cent earlier. Some investors are concerned Washington may curb access to offshore data centers with the most advanced processors.
INDEXES UP SLIGHTLY
The three major US stock indexes, however, edged higher, with an index of semiconductors up 0.2 per cent after reversing early declines. A world stocks index was flat.
"The market's absorbed this reasonably well. You notice some of Nvidia's losses have been offset by gains in competitors," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"As far as Nvidia's future, there's a lot that remains unknown about this whole episode," he said. "Are we seeing the bottom today? Will there be more bad news coming out that will drive down the stock again? That's the existential question looking at Nvidia today. "
The Dow Jones Industrial Average rose 210.10 points, or 0.40 per cent, to 52,696.65, the S&P 500 gained 21.99 points, or 0.29 per cent, to 7,641.10 and the Nasdaq Composite added 79.16 points, or 0.31 per cent, to 25,545.34.
MSCI's gauge of stocks across the globe eased 0.02 points to 1,121.13. The pan-European STOXX 600 index was last up 0.23 per cent. It hit its first record high since August.
US Treasury yields rose after US President Donald Trump said the US does not need a deal with Iran. The yield on benchmark US 10-year notes rose 7.73 basis points to 5.066 per cent.
Germany's 10-year Bund yield dipped.
DOLLAR EXTENDS RECENT GAINS
The US dollar index reached a fresh 19-month high as investors continued to weigh US rate increase expectations.
Traders see a December hike from the Federal Reserve as likely.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,rose 0.26 per cent to 103.14, with the euro down 0.25 per cent at $1.1061. Against the Japanese yen, the dollar strengthened 0.08 per cent to 159.9.
US crude rose 0.32 per cent to $86.81 a barrel and Brent climbed to $93.82 per barrel, up 1.14 per cent.
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