Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dow, S&P 500 suffer worst one-day fall in five months as Apple drags

Published 01/29/2018, 04:55 PM
Updated 01/29/2018, 04:55 PM
© Reuters. Traders work on the floor of the NYSE in New York

© Reuters. Traders work on the floor of the NYSE in New York

By Stephen Culp

NEW YORK (Reuters) - Wall Street pulled back from record highs on Monday, with the Dow and the S&P 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares.

Shares of Apple (O:AAPL) fell 2.1 percent on news that the company will halve production of its $999 iPhone X smartphone. The company is due to report earnings on Thursday.

"The market's responding to the question of what Apple's earnings are going to look like, specifically what kind of guidance are they going to give on iPhone X sales," said Bucky Hellwig, senior vice president at BB&T (NYSE:BBT) Wealth Management in Birmingham, Alabama.

The S&P technology index (SPLRCT) fell 0.9 percent and was the biggest drag on the benchmark index following Wall Street's strongest four-week run since 2016.

The Cboe Volatility Index (VIX), the most widely followed barometer of expected near-term volatility for U.S. stocks, closed up 2.76 points, or nearly 25 percent, at 13.84, its highest close since Aug. 18. "We've had a long run in the stock market, and we've seen some unease, but that could be reversed with a couple of good days," said Hellwig.

Benchmark U.S. 10-year Treasury note (US10YT=RR) yields hit their highest since 2014 due to economic strength, which added to pressure on defensive sectors such as utilities, real estate and telecoms.

The Dow Jones Industrial Average (DJI) fell 177.23 points, or 0.67 percent, to 26,439.48, the S&P 500 (SPX) lost 19.34 points, or 0.67 percent, to 2,853.53 and the Nasdaq Composite (IXIC) dropped 39.27 points, or 0.52 percent, to 7,466.51.

The Dow and S&P 500 had their biggest daily percentage declines since Sept. 5. The S&P 500 still is up 6.7 percent since the end of 2017.

It was a rocky start to an action-packed week, which will feature U.S. President Donald Trump's first official State of the Union speech late Tuesday.

Also ahead this week is the Federal Reserve's meeting, the U.S. employment report and earnings from a host of high-profile names including Amazon.com (O:AMZN), Alphabet (O:GOOGL) and Facebook (O:FB).

Fourth-quarter earnings growth for the S&P 500 is now seen at 13.2 percent, up from 12 percent at the beginning of the year, according to Thomson Reuters data. Of the companies that have reported, about 80 percent have beaten Wall Street expectations.

Aside from higher yields, telecom stocks also slipped on reports that the U.S. government was considering building a 5G wireless network to guard against spying.

AT&T (N:T) was down 1.5 percent, Verizon (N:VZ) slipped 1.1 percent and Sprint (N:S) pulled back by 1.9 percent.

Dr Pepper Snapple Group (N:DPS) jumped to an all-time high after K-cup maker Keurig Green Mountain said it will buy the company in a deal worth more than $21 billion. The stock ended up 22.4 percent at $117.07.

Declining issues outnumbered advancing ones on the NYSE by a 4.65-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored decliners.

The S&P 500 posted 126 new 52-week highs and three new lows; the Nasdaq Composite recorded 153 new highs and 29 new lows.

© Reuters. Traders work on the floor of the NYSE in New York

About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.