Wall Street plays down investor fears of faltering trading boom

The US stock markets started off uneven on Tuesday as a sell-off in chip stocks continued, exerting pressure on equity markets. Investor focus was on the start of the earnings season. The Dow Jones Industrial Average, a broad measure of large-cap stocks, rose about 0.6 percent at the opening bell to 52,092 points. The broader S&P 500 index opened unchanged at 7,813 points.

The technology-focused Nasdaq index, however, slipped about 0.4 percent at 27,138 points. The Nasdaq 100, representing the 100 largest non-financial companies by market capitalization, opened down 0.8 percent at 30,404 points. On Monday, major indices had closed slightly lower, excluding the S&P 500. The trading day was weighed down by a further rise in oil prices and a sell-off in US chip stocks.

Semiconductor values in the US and Asia fell sharply due to speculation about an end to the rapid price hikes in memory chips. Reports emerged that Chinese semiconductor giant CXMT planned to launch a new generation of memory chips for data centers, aiming to reduce its technological gap with Western suppliers. Analyst Andreas Lipkow of broker CMC Markets said the competitive pressure from the Middle Kingdom fueled concerns about how long the high valuations and profit margins of established chip companies could be justified.

The sell-off in technology stocks drew investors towards government bonds. Reflecting the rising bond prices, the yield on 10-year US bonds fell six basis points to 5.18 percent.