Industry index nears correction after falling from Sept. 16 peak
Investor fears about difficulties with the memory chip supply chain are causing semiconductor stocks to slump, bringing a basket of sector heavyweights into correction territory.
Traders’ fears about supply bottlenecks, profit warnings around the world, and pressure from rising U.S. Treasury bond yields have caused chip makers’ stock to slump in the last month.
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The Philadelphia Semiconductor Index is down 8.7% from its peak on September 16, following the S&P 500 Index and trading at its lowest level in nearly two months.
As the index tests its 200-day moving average, technical support levels have been stable since last May.
Micron Technology Inc. fell due to concerns over memory chip pricing, while Amkor Technology Inc. was the first to fall after Gredit Suisse downgraded the stock to neutral due to improved momentum.
The industry earnings reports likely ramp up next week, when ASML Holding and Lam Research Corp. report earnings on October 20 and Intel Corp. on October 21.