INSUBCONTINENT EXCLUSIVE:
Technology stocks dragged down Wall Street on Tuesday after a surprise sales warning from bellwether Apple fanned worries about the impact
of the coronavirus outbreak on global supply chains.
The world's most valuable technology firm said it was unlikely to meet its
March-quarter sales guidance because of slower iPhone production and weaker demand in China, sending its shares down 2.5%.
The news also
sent shares of Apple suppliers, including Qualcomm Inc, Broadcom Inc, Qorvo Inc and Skyworks Solutions Inc, lower by 1.9% to 3%.
Chipmakers,
which are heavily dependent on China for revenues, slipped with the Philadelphia SE Semiconductor index shedding 1.6%, while the broader S-P
technology sector lost 0.7%.
Apple's warning highlights issues that will eventually hurt a lot of companies with exposure to China, said
Art Hogan, chief market strategist at National Securities in New York.
"It has shifted people's focus back to the ultimate economic damage
in the wake of this coronavirus," Hogan said.
While the exact hit to growth from the epidemic in China - the global manufacturing hub -
still remains to be seen, hopes that the damage would only be temporary have helped Wall Street's main indexes clinch record highs as
early as last week.
At 9:52 a.m
ET, the Dow Jones Industrial Average was down 106.66 points, or 0.36%, at 29,291.42, while the S-P 500 was 7.49 points, or 0.22%, lower at
3,372.67.
The Nasdaq Composite was down 19.12 points, or 0.20%, at 9,712.05.
Investors also parsed through mixed corporate earnings
reports.
Walmart Inc forecast slowing online growth for the year after reporting weak results for the holiday quarter, suggesting it was
leaking sales to Amazon.com
However, shares of the world's biggest retailer rose 1%.
Conagra Brands Inc shed 7.4% after the packaged food company lowered its
full-year profit and sales outlook.
Kroger Co climbed 6.6% after Warren Buffett's Berkshire Hathaway Inc unveiled a $549.1 million stake
in the supermarket chain.
Asset manager Franklin Resources Inc said it would buy mutual fund company Legg Mason Inc in an all-cash deal
valued at $4.5 billion, to create an investing giant with about $1.5 trillion in assets under management.
Shares of Franklin jumped 9.4% and
Legg Mason surged 23.9%.
Declining issues outnumbered advancers for a 1.20-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq.
The
S-P index recorded 53 new 52-week highs and three new lows, while the Nasdaq recorded 70 new highs and 28 new lows.