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Stocks - Dow Drops Nearly 400 Points as Apple Leads Tech Rout

Published 11/19/2018, 04:00 PM
Updated 11/19/2018, 04:03 PM
© Reuters.

© Reuters.

Investing.com – A rout in Apple and Facebook (NASDAQ:FB) Monday swept through tech, prompting a wave of selling across the broader market.

The Dow Jones Industrial Average fell about 1.56%, the S&P 500 fell 1.66%, while the Nasdaq Composite fell 3.03%.

Sentiment soured on FAANG stocks after investors digested a Wall Street Journal report that Apple (NASDAQ:AAPL) was considering cutting production as demand for its newest slate of phones was not as strong as the company had hoped. Its shares fell 4%.

The plunge in Apple sent shockwaves throughout shares of its suppliers, some of whom had cut their growth outlook last week, adding further pressure in tech.

Facebook (NASDAQ:FB) also exacerbated the slide in the broader market as The Wall Street Journal reported that CEO Mark Zuckerberg may be driving out top executives. Its shares fell 6%.

The report from the Journal, indicating further signs of turmoil for the social media giant, comes just days after the company had denied allegations that it had conspired to cover up Russian influence and propaganda on its platform.

Energy, meanwhile, also played a role in the selloff even as U.S. oil prices settled higher, on potential European Union sanctions on Iran and possible OPEC production cuts.

In a sign of skittish sentiment on stocks, defensive sectors of the market like estate and utilities closed in positive territory for the day as investors sought refuge from riskier sectors.

Lingering optimism on U.S.-China trade was soiled, meanwhile, following Vice President Mike Pence's remarks Sunday, asserting that there would be no end to U.S. charges on $250 billion worth of Chinese goods unless China changed its practices toward trade. Pence's comments come ahead of a crucial meeting between President Donald Trump and Chinese President Xi Jinping at the G20 summit slated for the end of November.

So far, the United States has slapped tariffs on $250 billion worth of Chinese goods, about half the value of U.S. imports from the country. China has retaliated with tariffs on $110 billion worth of American exports.

On the economic front, investors had to contend with yet another report pointing to a slowdown in the U.S. housing market, which did little to lift sentiment on equities.

The National Association of Home Builders/Wells Fargo Housing Market Index fell eight points to 60 in November. That was the lowest reading since August 2016.

In corporate news, Tesla rival NIO (NYSE:NIO) soared 9% after Citron Research Andrew Left delivered an upbeat assessment of the electric automaker, claiming it is "not just a car company," but a lifestyle and brand that is "ready to disrupt."

Top S&P 500 Gainers and Losers Today:

Helmerich & Payne (NYSE:HP), Molson Coors (NYSE:TAP) and AmerisourceBergen (NYSE:ABC) were among the top S&P 500 gainers for the session.

Nvidia (NASDAQ:NVDA), Align Technology (NASDAQ:ALGN) and Salesforce.com (NYSE:CRM) were among the worst S&P 500 performers of the session.

Latest comments

Is this the beginning of the end for Apple's dominance ? Hope not!
apple has relied on the iPhone for the most part as it's only source of revenue. If the tsunami phone is what they hope it will be, it will be like you standing in line for months on end for the 1st IPhone. The tsunami will be a game changer, Period. I'm not an apple fan by any means. Now for the best part they had to source out with this tiny little co. called JABIL. For every phone sold they will have to pay royalties chin e JABIL will jump for a 25 dollar stock to who knows what. You can rely that JABIL will be around at least two yrs. The worst source of Lithium drainage isn't the software or the apps, it's the ********screen. It's an LCD that gives you that high-end resolution, Period. Samsung is having to do the same as well. They are going OLED. They have a phone that will be rolling out soon. It's the phone they are hashing out a new concept. It will be like a big round pin the same size in length except this phone will pull out. Again it's an OLED.
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