Apple’s slowdown in China ripples through global financial markets

Global markets shuddered Thursday after Apple said China is buying fewer iPhones, amplifying fears that the world’s second-biggest economy is fading.

Apple chief executive Tim Cook pointed to the unforeseen “magnitude of the economic deterioration” in China, the world’s largest smartphone market.

Apple shares sank 10 percent, and the Dow Jones industrial average dropped 660 points, or 2.8 percent, to close at 22,686.

The Standard & Poor’s 500-stock index slumped 2.5 percent, and the technology-heavy Nasdaq composite fell 3 percent. The Nasdaq dipped into bear territory, which is at least 20 percent below its most recent peak.

Stocks steered lower after a disappointing manufacturing report from the Institute for Supply Management — with the largest one-month drop since 2008.

Nine of 11 S&P 500 sectors were in the red, with technology leading the way down. Real estate and utilities hung on to positive territory.

Apple was the biggest drag on the Dow — 29 of 30 components were down. Microsoft, Intel and Cisco were all hit hard on their exposure to China. Boeing, Caterpillar and United Technology were down. Only Verizon ended in positive territory.

Asian and European markets were reeling from the Apple announcement, down across the board. The German Dax and the benchmark index in France both traded more than 1.5 percent lower.

Kevin Hassett, chairman of the White House Council of Economic Advisers, said there is more pain in store until the United States and China resolve their trade differences.

“It’s not going to be just Apple,” Hassett said in an interview on CNN. “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”

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