Stock futures down as tech rout continues

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[June 12, 2017]  By Yashaswini Swamynathan

(Reuters) -
U.S. stock index futures were lower on Monday, with Nasdaq futures taking the biggest hit as investors locked in gains on the richly-valued technology sector.

Technology stocks have been enjoying a record-setting rally, helped largely by strong quarterly earnings. The S&P 500 technology index <.SPLRCT> has risen 18.5 percent this year and is on track for its best yearly performance since 2014.

Apple <AAPL.O> suffered its worst drop in 14 months on Friday, sparking a selloff in technology stocks amid news of using slower modems in upcoming iPhones. Shares of the world's most valuable listed company fell 2 percent to $145.97 in heavy premarket trading on Monday.

Big technology names such as Mircosoft, Facebook, Netflix and Alphabet were in the red.

Shares of Apple suppliers, including Qualcomm, Skyworks Solutions and Micron Tech, also took a hit.

However, a 1.2 percent rise in oil prices may cushion the blow on the major indexes from the tech selloff.

Investors are also likely to be on the sidelines ahead of the Federal Reserve's two-day meeting starting Tuesday, where traders see a 94 percent chance for an interest rate hike.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 2, 2017. REUTERS/Brendan McDermid

Shares of General Electric rose 2.7 percent to $28.70 after the company said Jeff Immelt would retire as chief executive and would be replaced by John Flannery, the head of GE healthcare, ending a years-long succession plan.

Coherus BioSciences  tumbled 25 percent to $15.50 after the FDA denied the approval of its biosimilar for Amgen Neulasta, which fights infections in cancer patients. Amgen was up 1 percent to $165.75.

No top-tier economic data is scheduled for the day. The Federal Reserve is in a self-imposed quiet period ahead of Tuesday's meeting.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)

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