Dow, S&P 500 decline after Apple’s sales warning

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A woman wearing a protective face mask walks outside a closed-off Apple store in Beijing on Feb 3, 2020. PHOTO: AFP

NEW YORK (REUTERS) - The Dow and S&P 500 fell on Tuesday (Feb 18) after a sales warning from Apple left investors assessing the impact of the coronavirus outbreak on US companies.

But indexes ended off the day's lows and the Nasdaq ended a touch higher as Apple Inc trimmed its losses in late-session trading.

The world's most valuable technology firm said it would fall short of its recently announced quarterly sales target because of slower iPhone production and weaker demand in China due to the virus. Its shares ended down 1.8 per cent at US$319, while its low of the session was US$314.61.

"Certainly this was not welcome news, but I don't think it's a debacle either," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"In general, investors are not overly concerned by the news from Apple as a read through to technology or the market overall."

While the exact hit to economic and earnings growth from the epidemic in China remains to be seen, hopes that the damage would only be temporary have helped boost confidence on Wall Street in recent sessions.

Still, Apple suppliers, Qualcomm, Broadcom, Qorvo and Skyworks Solutions, all ended down between 1 per cent and about 2 per cent on the day.

China-exposed chipmakers slipped, with the Philadelphia SE Semiconductor index shedding 1.4 per cent, while the broader S&P technology sector lost 0.4 per cent.

The Dow Jones Industrial Average fell 165.89 points, or 0.56 per cent, to 29,232.19, the S&P 500 lost 9.87 points, or 0.29 per cent, to 3,370.29.

The Nasdaq Composite added 1.57 points, or 0.02 per cent, to 9,732.74, eking out a record closing high.

Walmart shares rose 1.5 per cent even after the world's biggest retailer forecast slowing online growth for the year and reported weak results for the holiday quarter.

Conagra Brands shed 6.1 per cent after the packaged food company lowered its full-year profit and sales outlook.

Declining issues outnumbered advancing ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favoured decliners.

The S&P 500 posted 71 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 127 new highs and 66 new lows.

Volume on US exchanges was 7.23 billion shares, compared to the 7.61 billion average for the full session over the last 20 trading days.

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