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* Futures extend losses after Morgan Stanley results
* U.S. proposes law to ban sale of U.S. chips to Huawei, ZTE
* Futures down: Dow and S&P 0.44 pct, Nasdaq 0.40 pct
By Medha Singh
Jan 17 (Reuters) - Wall Street’s main indexes were set to retreat from one-month highs on Thursday, hit by weak results from Morgan Stanley and renewed concerns over the progress of Sino-U.S. trade talks.
Shares in the Wall Street investment bank tumbled 5 percent after it blamed rocky markets for a decline in its adjusted quarterly profit.
Its shares had risen 2 percent ahead of its quarterly report following strong earnings from peers Goldman Sachs and Bank of America on Tuesday.
Sentiment was already weak after U.S. lawmakers introduced bills on Wednesday that would ban the sale of U.S. chips or other components to Huawei Technologies Co Ltd, ZTE Corp or other Chinese telecommunications companies that violate U.S. sanctions or export control laws.
Investors worried that the action against Huawei, which drew sharp criticism from China, could further complicate trade talks between Washington and Beijing ahead of Chinese Vice Premier Liu He’s visit to Washington later this month.
Adding to the pain, the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd (TSMC) forecast its sharpest quarterly revenue fall in a decade, joining other technology and semiconductor companies that have warned of a slowdown in global smartphone demand.
TSMC’s customers also took a hit, with Apple Inc down 0.7 percent and Qualcomm off 0.5 percent. Its peers and suppliers such as Intel Corp, Nvidia and ASML fell between 0.33 percent and 0.63 percent.
At 7:33 a.m. ET, Dow e-minis were down 107 points, or 0.44 percent. S&P 500 e-minis were down 11.5 points, or 0.44 percent and Nasdaq 100 e-minis were down 26.75 points, or 0.4 percent.
Netflix Inc dipped 0.3 percent ahead of its results after the bell on Thursday. The video-streaming pioneer, which is also the first member of the high-profile FAANG group of companies to report results, raised subscription rates earlier this week.
Bank stocks drove Wall Street’s main indexes to one-month highs on Wednesday, keeping them on track for their fourth straight week of gains.
The S&P 500 stands 12 percent away from its Sept. 20 record close, after hitting a 20-month low in December on concerns over a global economic slowdown.
China’s economy is expected to cool further this year as domestic demand weakens and exports take a hit from U.S. tariffs, a Reuters poll showed.
Analysts have cut their expectations for S&P 500 companies’ fourth-quarter profit growth to 14.3 percent from the 20.1 percent forecast on Oct. 1, per IBES data from Refinitiv. (Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)