The S&P 500 fell 2.5% Thursday, as a revenue warning from Apple (NASDAQ:AAPL) and weak manufacturing data fueled concerns about a slowdown in global economic growth, undermining the broad market.
The DJIA lost 2.8%, the NAS Comp lost 3.0%, the Russell 2000 lost 1.8%.
On the day, 9 of the 11 S&P 500 sectors finished in the Red.
The heavily-weighted IT sector led the retreat with a loss of 5.1%, as Apple dragged on the group with a steep loss of 10.0%, which sent the stock to a mark not seen since mid-2017.
The industrials (-3.0%) and materials (-2.8%) sectors also under-performed the broad market.
Apple shook the market when it lowered its revenue guidance for the 1st time since Y 2002. CEO Tim Cook attributed the lower outlook to weaker demand in China, where the economy is slowing.
The unexpected revision Wednesday is weighing heavily on China-exposed companies across sectors that have already been struggling to cope with trade dispute uncertainties.
Plus, Kevin Hassett, Chairman of the White House Council of Economic Advisers, cautioned Thursday that more US companies can be expected to lower earnings forecasts as the softer Chinese economy cuts into their sales.
A potential slowdown in China has been an overhang on investor sentiment for the past several months, and intensified this week after Key manufacturing data showed factory conditions there slumped in December.
Apple conceded that it failed to foresee the “magnitude of the economic deceleration, particularly in Greater China.”
US stock market sectors with the highest exposure to China include technology, energy, industrials, consumer staples and consumer discretionary, according to a JPMorgan note published in July 2018.
Thursday, the major US stock market indexes finished at: DJIA -660.02 at 22686.22, NAS Comp -202.43 at 6463.52, S&P 500 -62.14 at 2447.85
Volume: Trade on the NYSE came in at 958-M/shares exchanged
- Russell 2000 -1.3% YTD
- S&P 500 -2.4% YTD
- NAS Comp -2.6% YTD
- DJIA -2.8% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bearish in here.
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