NEW YORK: US stocks snapped a three-day rally on Friday as Apple shares dropped following a disappointing forecast and the White House dampened optimism over U.S.-China trade talks.
Apple Inc tumbled 6.6 percent, sending its market value below $1 trillion at the close, a day after the iPhone maker warned that sales for the crucial holiday quarter may miss expectations. Apple in August had become the first publicly listed U.S. company with a $1 trillion market value.
The forecast dragged down shares of Apple’s U.S. suppliers, mostly chipmakers, and pushed the S&P technology sector down 1.9 percent.
“The tone was set by Apple’s earnings. That’s clearly been a headwind all day,” said Eric Kuby, chief investment officer, North Star Investment Management Corp, Chicago.
Kuby also cited weak earnings from Kraft Heinz as having an effect on the broader market. “With Kraft, you have two different types of companies that were disappointing,” he said.
Remarks by White House economic adviser Larry Kudlow on CNBC about trade talks with China also dampened the mood. While President Donald Trump will meet with Chinese President Xi Jinping this month, he has not asked U.S. officials to draw up a proposed trade plan, Kudlow said, contradicting a report earlier in the day that had buoyed hopes of a trade dispute resolution.
Stocks extended losses following Kudlow’s comments, and the trade-sensitive S&P 500 industrial index, which was up earlier in the session, closed down 0.3 percent.
“That tells you tariffs are still a factor, and from the reaction we saw there, that tells me it’s a heavier weighting in the investment decision than what people were anticipating before,” said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio, which manages about $1.3 billion.
The Dow Jones Industrial Average fell 109.91 points, or 0.43 percent, to 25,270.83, the S&P 500 lost 17.31