Bengaluru: The Dow Jones Industrial Average shed more than 400 points on Monday, as a slump in Apple shares battered the tech sector, with conflicting signals over the state of play between the United States and China on their trade dispute kept investors on edge. Shares of Apple Inc. fell 3.8% after the Wall Street Journal reported the company had cut production orders in recent weeks for all three iPhone models launched in September.
The iPhone maker’s stock, which has played a major role in powering a decade-long bull run for equities, is down nearly 20% from a record high in October following a disappointing holiday-quarter sales forecast and weak outlook from several of its suppliers.
The stock was the biggest drag on the technology sector, which fell 3.3% and was the top loser among the 11 major S&P sectors trading in the red.
Consumer discretionary stocks tumbled 2.1% and communication services fell 2.7%.
“Without the FANG leadership, including Apple, the market is going to struggle," said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York.
Trading volumes were thin in a holiday-shortened week ahead of Thanksgiving on Thursday and a shorter session on Friday which brings a slight volatility to markets, traders said.
Shares of Apple suppliers were also hit, with Lumentum Holdings Inc., Universal Display Corp., Cirrus Logic Inc. and Skyworks Solutions Inc. down between 2.6% and 6%.
The rest of the FAANG group—Facebook Inc. Amazon.com Inc. Netflix Inc. and Alphabet Inc (Google)—shed between 3% and 4.8%.
The Philadelphia SE Semiconductor index, which also includes some Apple suppliers, dropped 2.6%, extending losses from the previous session after an underwhelming forecast from Nvidia Corp. weighed on the sector.
“There’s been a loss of trust in managements at Apple and Nvidia—both overpromised and under-delivered... Rarely do you see these kind of moves in a holiday week," said Doug Biben, founder and portfolio manager at BCM, Los Angeles.
At 12:59pm, EDT the Dow Jones Industrial Average was down 392.90 points, or 1.55%, at 25,020.32, the S&P 500 was down 40.74 points, or 1.49%, at 2,695.53 and the Nasdaq Composite was down 185.94 points, or 2.57%, at 7,061.93.
Over the weekend, Asia-Pacific leaders failed to agree on a communique for the first time ever at a meeting in Papua New Guinea with US-China trade worries on the forefront.
US vice president Mike Pence said in a blunt speech on Saturday that United States will not back down from its trade dispute with China unless Beijing bows to US demands, dampening Friday’s trade optimism that was fuelled by President Donald Trump’s comments.
Boeing Co. and Caterpillar Inc., seen as trade sensitive stocks, fell 4.8% and 2.5%, respectively.
Declining issues outnumbered advancers for a 2.46-to-1 ratio on the NYSE and for a 2.59-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and 16 new lows, while the Nasdaq recorded 16 new highs and 123 new lows.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.