Tech stocks take heart from tariff exceptions

[September 18, 2018]   By Shreyashi Sanyal

(Reuters) - U.S. stock exchange futures were higher on Tuesday, helped by a rise in oil prices and concessions that analysts said made the latest round of trade tariffs on China less damaging than initially feared.

New York markets fell in late trade on Monday after President Donald Trump announced charges on another $200 billion of Chinese goods.

Trump's holding of the main tariff rate at 10 percent for the moment, however, allied to a series of exclusions for goods including smartwatches produced by Apple <AAPL.O> and Fitbit <FIT.N> strengthened the technology stocks seen as most exposed to a still worsening trade war.

Collection of these tariffs on the U.S. list will start on Sept. 24 but the rate will only rise to 25 percent by the end of 2018, although Trump also threatened duties on about $267 billion more if China retaliated.

"(The new tariffs) were less tough than expected as it comes in two stages. In other words, Trump is giving China the option," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Shares of Apple rose 0.3 percent in early premarket trading, after falling on trade concerns on Monday, although the iPhone was also not among the 'wide range' of products Apple said would be hit by the $200 billion round.

The FAANG group of major tech stocks - also including Netflix <NFLX.O>, Facebook <FB.O>, Google-parent Alphabet <GOOGL.O>, and Amazon <AMZN.O> - were all slightly higher in premarket trading, after closing lower on Monday.
 

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 12, 2018. REUTERS/Brendan McDermid

Shares of energy companies including Exxon Mobil <XOM.N> gained after Saudi Arabia said it was comfortable with a higher price range, pushing global crude prices higher. [O/R]

At 7:08 a.m. ET, Dow e-minis <1YMc1> were up 61 points, or 0.23 percent. S&P 500 e-minis <ESc1> were up 6 points, or 0.21 percent and Nasdaq 100 e-minis <NQc1> were up 21.25 points, or 0.29 percent.

The most-traded stock in premarket was chipmaker Advanced Micro Devices <AMD.O>, up 2.1 percent, while peer Nvidia <NVDA.O> gained 0.5 percent after brokerage Mizuho raised its share price targets for both. A third chipmaker, Micron <MU.O>, rose 1.1 percent.

Oracle <ORCL.N> fell 3.6 percent after the business software maker fell short of revenue estimates as it struggled to make inroads in the highly competitive cloud computing market.

(This version of the story has been refiled to add dropped word in lead)

(Reporting by Shreyashi Sanyal in Bengaluru; editing by Patrick Graham)

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