Dow Jones ends down 2.8 percent after weak Apple forecast : US data

New York | Wall Street suffered another pummelling on Thursday following a downbeat outlook from Apple on China sales and surprisingly weak US manufacturing data.

The Dow Jones Industrial Average finished down 2.8 per cent, or 660 points, at 22,686.22.

The broad-based S&P 500 slid 2.5 per cent to 2,447.89, while the tech-rich Nasdaq Composite Index sank 3.0 per cent to 6,463.50.

Apple plunged 10 per cent to USD 142.19 in its worst session since 2013, losing almost USD 75 billion in market value.

The tech giant on Wednesday trimmed its sales forecast for the upcoming quarter, citing weak iPhone sales in China due in part to the US-China trade war.

That was followed Thursday by Institute for Supply Management data showing US manufacturing activity at a two-year low. The data still showed growth, but suggested the United States was seriously affected by a slowing global economy and global trade tensions.

The one-two developments “feed into the worries about the global growth rate,” said Nate Thooft, a senior portfolio manager at Manulife Asset Management. “It does increase the anxiety people have.” Some analysts questioned the extent to which Apple’s travails were reflective of broader macro trends as opposed to being company-specific.

But White House economist Kevin Hassett said Apple was not alone, telling CNN there were “a heck of a lot of US companies” exposed to the Chinese market that were likely to see earnings downgraded until Washington and Beijing resolved their differences on trade.

The Apple and ISM developments overshadowed ADP’s employment report, which showed private-sector firms had added 271,000 jobs in December, well above analyst forecasts.

That data came ahead of Friday’s more closely-watched Department of Labour report. Analysts expect the US added 180,000 jobs last month and unemployment held at 3.7 per cent.

Drug company Celgene surged 20.7 per cent after it reached a deal to be bought by the larger pharma company Bristol-Myers Squibb for USD 74 billion. Bristol-Myers fell 13.3 per cent.

Dear Readers,
As an independent media platform, we do not take advertisements from governments and corporate houses. It is you, our readers, who have supported us on our journey to do honest and unbiased journalism. Please contribute, so that we can continue to do the same in future.

Related posts