AP Photo/Seth Wenig
- Wall Street opened sharply lower Thursday after a letter lowering Apple’s revenue forecast stirred growth concerns.
- In 2018, the major averages posted their worst year since 2008.
- Watch the US indexes trade in real time here.
Stocks fell Thursday after a warning from Apple fanned fears about the prospect of slowing economic growth around the world, adding to jitters about political turmoil in Washington and rising interest rates.
The Dow Jones Industrial Average shed about 580 points, or 2.52%, on Thursday morning. The S&P 500 fell 2.02%, and the Nasdaq Composite lost 2.36%. Stocks have suffered several weeks of dramatic swings, completing their worst year since 2008 on Monday.
Apple issued a letter Wednesday in which CEO Tim Cook partly blamed weak iPhone sales in China for the lowering of Apple’s revenue forecast. That same day, data showed private-manufacturing activity in the world’s second-largest economy contracted for the first time in 19 months. Shares of Apple plunged more than 9% following the announcement.
Cook said the technology giant hadn’t anticipated the degree of deceleration taking place in China, underscoringexpectations for major economies to lose steamin coming months.
High-flying technology companies led the sell-off in morning trading Thursday, with the FANG+ Index down 2.7%. Bellwether industrial companies, including Boeing, Caterpillar, and 3M, fell as much as 4%.
“This adds fuel to the fire of concerns about slowing global growth and/or a trade war, and compounds this week’s China PMI Manufacturing misses,” the Accendo Markets analysts Mike van Dulken and Artjom Hatsaturjants said in an email. “After Tesla announced price cuts, that’s two New Year kicks for the Tech sector which has resumed its October and December sell-off.”
On Wednesday, Tesla said itdelivered fewer Model 3 vehiclesthan expected in the fourth quarter and lowered prices on its models by $2,000 to help offset federal tax credits that were cut in half this week.
Also keeping investors on edge, the federal government is in its second full week of a partial shutdown. House Democrats taking control of the chamber plan to pass a proposal to reopen the government Thursday as the 116th Congress convenes, but it could face opposition in the Senate or from President Donald Trump.
“The shutdown increases uncertainty and adds to the laundry lists of risks affecting both the global and domestic economy including: Fed policy, Brexit, US-China trade relations and others,” Bank of America Merrill Lynch economists said in a research note Thursday.
On the commodities front,oil pricesclimbed more than 2%, with West Texas Intermediate trading just under $47 a barrel and Brent around $55.60. Prices have shed more than a third from October highs as traders fret over the possibility of oversupply and expectations for dampened demand.