US Stocks Fall after Apple Closes 2%

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US Stocks Close Lower on Apple Warning

(AP) — Major U.S. stock indexes are closing mostly lower Tuesday, as the market gives up some of its gains from the past two weeks. The selling, which lost some of its momentum in the final hour of trading, came as investors weighed the impact of the virus outbreak in China on Apple and other major companies. Tech companies and banks led the selling. Utilities and communication services stocks held up well. The S&P 500 index fell 0.3% to 3,370. The Dow Jones Industrial Average slid 165 points, or 0.6%, to 29,232. The Nasdaq inched up less than 0.1%. Bond yields fell.

Major U.S. stock indexes were mostly lower in late-afternoon trading Tuesday, putting the market on track to give up some of its solid gains from the past two weeks.

The selling, which lost some of its momentum in the final hour of trading, came as investors weighed the impact of the virus outbreak in China on Apple and other major companies.

The tech giant said revenue will fall short of previous forecasts in the fiscal second quarter because production has been curtailed and consumer demand for iPhones has slowed in China. Apple’s stores there are are either closed or operating on reduced hours.

Technology stocks accounted for a big slice of the selling. Apple shed 1.8%. Some chipmakers, which also rely heavily on China for sales and supplies, also fell. Intel shed 1.7%.

Banks and energy stocks declined. HSBC said it will cut 35,000 jobs and shed $100 billion in assets. Its shares dropped 5.5%. Wells Fargo slid 2.5% and Schlumberger dropped 1.9%.

Bond prices rose. The yield on the 10-year Treasury fell to 1.55% from 1.58% late Friday.

Communication services stocks and utilities held up better than most of the market. Dish Network climbed 3.5% and Xcel Energy rose 1.4%.

KEEPING SCORE: The S&P 500 index fell 0.3% as of 3:31 p.m. Eastern time. The Dow Jones Industrial Average slid 155 points, or 0.5%, to 29,242. It had been down 281 points. The Nasdaq recovered from an early slide, inching up less than 0.1%. The Russell 2000 index of smaller company stocks fell 0.2%. European and Asian markets fell.

CHINA OUTBREAK: The viral outbreak that began in China has now infected more than 73,000 people and continues to hurt businesses worldwide. The majority of the cases and deaths remain centered in China.

Businesses continue to feel the economic impact from the virus. The Beijing auto show, the industry’s biggest global event of the year, is being postponed indefinitely from its April date. And shares in Medtronic fell 3.7% after the medical device maker warned investors that the virus outbreak will impact its fourth-quarter results.

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Apple is among the most notable companies to warn investors that the virus will hurt its financial performance. While the projected revenue miss took Wall Street by surprise, some analysts played down the long-term impact of the iPhone production delay on Apple.

In a research note Tuesday, Canaccord Genuity analyst Michael Walkley said that Apple continues to perform strongly across all business lines, including iPhone 11 demand outside of China.

“Despite the lowered near-term iPhone sales estimates, we believe Apple remains on track to reach this target,” Walkley wrote.

Technology and health care companies have been the most vocal about mentioning the new coronavirus in their earnings conference calls, according to FactSet.

LOTS OF BENJAMINS: Financial services company Franklin Resources jumped 7.7% after saying it is buying competitor Legg Mason for $4.5 billion. The deal will create a financial company with a combined $1.5 trillion in assets under management. Legg Mason shares vaulted 24.3%.

EARNINGS SNAPSHOT: Traders continued to assess company earnings reports. Advance Auto Parts climbed 7.3% after the auto parts supplier’s results topped Wall Street’s forecasts. Conagra Brands dropped 5.5% after the food producer cut its fiscal 2020 profit and revenue forecasts, citing surprisingly weak consumption.

WEEK AHEAD: Investors face a shortened week because of Monday’s President’s Day holiday, but there are still several key earnings and economic reports on tap.

More than three-quarters of the S&P 500 has already reported financial results, and 51 companies are scheduled to release results this week. Devon Energy and Concho Resources will report their results later Tuesday. Progressive will report results on Wednesday and ViacomCBS will report on Thursday.

The government will release its producer price index for January on Wednesday, along with housing starts data.

Stocks fall after Apple warns coronavirus will hurt its revenue

The Standard & Poor’s 500 index and Dow Jones industrial average fell modestly Tuesday as U.S. stocks gave up some of their solid gains from the last two weeks.

Banks and technology stocks accounted for most of the decline. The Nasdaq composite eked out a tiny gain, notching another record high.

The selling came as investors weighed the effect of the coronavirus outbreak on Apple and other major companies.

The tech giant said revenue for its current quarter will fall short of previous forecasts because production has been curtailed and consumer demand for iPhones has slowed in China. Apple’s stores there are either closed or operating on reduced hours.

The iPhone maker is among the most notable companies to warn investors that the virus will hurt its financial performance. Medical device maker Medtronic also warned Tuesday that the outbreak will affect its quarterly results.

“The longer this goes on, the greater the focus is going to be on how much is this going to impact companies like Apple, which is considered not only a bellwether in tech but a bellwether for the market overall,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab.

The S&P 500 index fell 9.87 points, or 0.3%, to 3,370.29. That’s just below the all-time high it set Friday.

The Dow slid 165.89 points, or 0.6%, to 29,232.19. The Nasdaq recovered from an early slide and finished with a gain of 1.56 points, or less than 0.1%, at 9,732.74.

The Russell 2000 index of smaller-company stocks fell 4.06 points, or 0.2%, to 1,683.52.

Bond prices rose. The yield on the 10-year Treasury fell to 1.56% from 1.58% on Friday.

Stocks began lower Tuesday as U.S. markets reopened after the Presidents Day holiday.

As in recent weeks, traders reacted to the latest developments in the coronavirus outbreak that began in China and has since infected more than 75,000 people. Most of the cases and 2,000-plus deaths remain centered in China.

Businesses worldwide are increasingly caught in the economic fallout from the outbreak. The Beijing auto show in April, the industry’s biggest global event of the year, is being postponed indefinitely.

Technology and healthcare companies have been the most vocal about mentioning the new coronavirus in their earnings conference calls, according to FactSet.

Although Apple’s projected revenue miss took Wall Street by surprise, some analysts played down the iPhone production delay’s long-term effect on the company. In a research note Tuesday, Canaccord Genuity analyst Michael Walkley said Apple continues to perform strongly across all business lines, including iPhone 11 demand outside China.

Apple shares fell 1.8%. Medtronic slid 4%.

Despite the uncertainty over the viral outbreak, investors have been willing to buy back into the market after a dip. The S&P 500 has ended higher the last two weeks and is holding on to a 4.5% gain this month.

For the most part, investors are betting that the economic fallout from the outbreak will be limited to the first three months of this year, Frederick said. But if companies signal that they expect lingering effects on their business into the second quarter, investors could become less eager to jump back into the market.

“There are just so many people out there that think every dip is a buying opportunity, and so far, they’ve been rewarded,” Frederick said. “We’re going to see that for a while, until we have a really big downturn and people really get hurt by it. We just haven’t had that in a long time.”

Technology stocks accounted for a big slice of the selling Tuesday. Declines hit several chipmakers, which rely heavily on China for sales and supplies. Intel fell 1.7%. Broadcom slid 2.2%.

Bank shares lost ground. HSBC said it will cut 35,000 jobs and shed $100 billion in assets. Its shares dropped 5.6%. Wells Fargo slid 2.5%.

Energy stocks also fell. Schlumberger declined 2.2%.

Communication services stocks and utilities held up better than most of the market. T-Mobile US rose 3.5%, and Xcel Energy rose 1.3%.

Traders continued to assess company earnings reports. Advance Auto Parts climbed 6.2% after the auto parts supplier posted results that beat Wall Street forecasts. Conagra Brands dropped 6.1% after the food producer cut its fiscal 2020 profit and revenue forecasts, citing surprisingly weak consumption.

Among S&P 500 companies still to release their earnings, Progressive will report Wednesday and ViacomCBS will report Thursday.

Financial services company Franklin Resources jumped 6.9% after saying it is buying competitor Legg Mason for $4.5 billion. The deal will create a financial company with a combined $1.5 trillion in assets under management. Legg Mason shares leaped 24.4%.

Benchmark crude oil was unchanged at $52.02 a barrel. Brent crude oil, the international standard, rose 8 cents to $57.75 a barrel. Wholesale gasoline rose 3 cents to $1.61 a gallon. Heating oil fell 3 cents to $1.67 a gallon. Natural gas rose 14 cents to $1.98 per 1,000 cubic feet.

Gold rose $17.30 to $1,600 an ounce. Silver rose 41 cents to $18.13 an ounce. Copper was unchanged at $2.61 a pound.

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Reference ID: #6cea4740-7583-11ea-8387-d393907476f9

U.S. stocks drop after Apple warns of financial hit from coronavirus

Updated on: February 18, 2020 / 4:15 PM / AP

Apple’s stock fell almost 2% at close of trading Tuesday, a day after the technology giant warned shareholders of a coming financial hit due to the coronavirus outbreak in China.

The maker of iPhones said it will fall short of its revenue forecasts in the quarter ending June 30 because of production problems in China. Demand for iPhones is also down in China because stores selling Apple products are either closed or operating on reduced hours.

Apple’s stock price dropped to about $320 a share following the news. Chipmakers, which also rely heavily on China for sales and supplies, saw their shares drop, too, with Intel Corp. shedding 1.2%. Banks and energy stocks also fell Tuesday: Wells Fargo slid 1.1% and Schlumberger slipped 1.4%.

The S&P 500-stock index was down almost 0.3% at close Tuesday, although the benchmark for the U.S. stock market remains up 3% since January 1. The Dow closed down 0.6%, or nearly 166 points.

The viral outbreak that began in China has now infected more than 73,000 people and killed more than 1,800. The majority of the cases and deaths remain centered in China.

Apple is the biggest company to warn investors as businesses around the world continue to feel the economic impact from the virus. The Beijing auto show, the car industry’s biggest global event of the year, is being postponed indefinitely from its April date.

Technology and health care companies have been the most vocal about mentioning the new coronavirus in their earnings conference calls, according to FactSet.

The virus will have a negative impact on online bookings for travel and perhaps a positive outcome for health care companies focused on vaccines, according to an Oppenheimer research note.

First published on February 18, 2020 / 12:28 PM

© 2020 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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