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Tech Shares Drag Markets Down After Top Apple Supplier Slashes Outlook Tech Shares Drag Markets Down After Top Apple Supplier Slashes Outlook
(about 2 hours later)
Stocks fell sharply on Monday, giving back some of their recent gains as investors dumped shares in some of the biggest technology companies. Stocks fell on Monday, giving back some of their recent gains as investors dumped shares in some of the large technology companies that hold outsized sway over major market indexes.
The Nasdaq composite was hit the hardest among the major benchmarks. The technology-heavy index was down 2.3 percent around midday. The S&P 500 fell 1.4 percent, and the Dow Jones industrial average was off 1.7. The Nasdaq composite was one of hit the hardest among the major benchmarks. The technology-heavy index was down 2.5 percent. The S&P 500 fell 1.7 percent, and the Dow Jones industrial average was off 2 percent.
Apple shares declined 4.4 percent after one of the iPhone maker’s suppliers, Lumentum, slashed its fiscal outlook for the current quarter and said it had received a request from one of its largest customers to reduce shipments. The company, whose shares were down 30 percent, did not specifically identify Apple in its warning. Apple is Lumentum’s largest customer, according to a regulatory filing. Apple shares declined 4.6 percent Monday after one of the iPhone maker’s suppliers, Lumentum, slashed its fiscal outlook for the current quarter and said it had received a request from one of its largest customers to reduce shipments. The company, whose shares were down 30 percent, did not specifically identify Apple in its warning. Apple is Lumentum’s largest customer, according to a regulatory filing.
Other large technology companies were also lower. Apple’s stumble seemed to weigh on other previously high-flying technology companies. Amazon was down 4 percent, and Facebook fell as much as 3 percent. The social network was briefly offline for many users Monday afternoon, giving visitors an error message saying “sorry, something went wrong.”
• The S&P 500’s technology sector was the worst performer, down 3.2 percent. Alphabet, the parent company of Google, and Netflix were both down more than 2 percent.
• Amazon stock was down more than 4 percent, and Facebook dropped as much as 3 percent. The social network was briefly offline for many users Monday afternoon, giving visitors an error message saying “sorry, something went wrong.” Alphabet, the parent company of Google, and Netflix were both down more than 2 percent. Monday’s slump in technology shares echoed the drop in October. Spurred on by concerns about rising interest rates, trade tensions and a potential peak in corporate profits, investors briefly pushed the broader market down nearly 10 percent below its late September peak and into negative territory for the year.
• Shares in Goldman Sachs tumbled 6.4 percent as questions mounted over what role the investment bank may have played in the looting of a multibillion-dollar Malaysian government investment fund. More recently, a rally had repaired much of that damage. Stocks jumped after last Tuesday’s contentious midterm elections were resolved, with the S&P 500 finishing the next day up more than 3.5 percent in November alone.
• General Electric stock fell 5.7 percent and was set for its fourth straight down day after comments by its new chief executive failed to calm investors’ concerns. But much of those gains evaporated in recent days and the pain hasn’t been exclusively because of tech stocks.
• Of the S&P 500’s 11 sectors, only utilities stocks were up on the day. On Monday, shares in Goldman Sachs tumbled 6.4 percent as questions mounted over what role the investment bank may have played in the looting of a multibillion-dollar Malaysian government investment fund.
General Electric’s stock fell 5.7 percent and was set for its fourth straight down day after comments by its new chief executive failed to calm investors’ concerns.
But Apple remains a key concern. With a market value of more than $900 billion, moves in the company's share price have an outsized effect on stock market indexes — such as the S&P 500 — that are weighted by market size.
That dynamic mostly has been a boon for the stock market in recent years. Apple shares rose more than 45 percent last year.
But investors are showing signs of are growing increasingly wary. Apple’s shares slumped after it reported earnings on Nov. 1 and said it would no longer report the numbers of iPhones it sells. So far this month, the company’s stock price is down more than 10 percent.