US stocks have plunged into a steep slide after Apple sent a shudder through Wall Street with word that iPhone sales in China are falling.
The rare warning of disappointing results from Apple reinforced investors’ fears that the world’s second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse.
The Dow Jones Industrial Average plunged as much as 677 points about an hour into trading, then began climbing back, but was still down more than 600 points at 3pm. The broader S&P 500 index was down 2.2 per cent.
Apple stock plummeted to close 9.7 per cent lower, erasing US$72 billion (NZ$107b) in value.
Other big exporters, including technology and heavy-machinery companies, also took big losses. Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.
The Dow Jones Industrial Average plunged as much as 677 points about an hour into trading, then began climbing back, but was still down more than 600 points at 3pm (local time). The broader S&P 500 index was down 2.2 per cent.
“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at Markets.com.
“Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”
Investors were also unsettled by a new report that showed signs of weakness in US manufacturing.
The US-China trade dispute threatens to snarl multinational companies’ supply lines and reduce demand for their products.
Companies such as