Investing.com - Stocks plunged Thursday after Apple’s revenue warning turned into palpable concern about a worldwide economic slowdown.
The Dow lost 2.8%, more than 650 points, while the S&P 500 index fell 2.5%. The Nasdaq Composite ended down 3%.
Trading kicked off in the red after Dow component Apple (NASDAQ:AAPL) warned on the revenue for its latest quarter, blaming weak China sales in particular.
Selling accelerated shortly after the bell when the Institute of Supply Management said its manufacturing purchasing managers' index fell to 54.1 in December from 59.3 the previous month.
And sentiment got weaker when White House economic adviser Kevin Hassett told CNN that a “heck of a lot” of U.S. companies would be cutting guidance like Apple until a trade deal between the U.S. and China countries was struck.
"We are seeing markets extrapolate Apple's news throughout several sectors and equate it to a deceleration in the global economy," said Christopher Anselmo, director at Nasdaq IR Intelligence.
"A lot of data in the past few days, including U.S. factory activity is pointing to a global economic slowdown. The data is just giving a magnitude of how broad this slowdown is and which regions it is affecting the most."
Money moved out of stocks and into bonds, pushing the 10-Year Treasury yield sharply lower to 2.557%.
Meanwhile, the chances of a Federal Reserve interest rate cut this year jumped sharply. Tomorrow, Fed Chairman Jerome Powell is set to speak shortly after the opening bell.
And today’s selloff will bring even more attention to Friday’s payrolls report, if that’s possible.
Among individual stocks, Apple fell 10%, while its suppliers also tumbled, with Skyworks Solutions (NASDAQ:SWKS) falling 10.7%, Cirrus Logic (NASDAQ:CRUS) losing 8.5% and Qorvo (NASDAQ:QRVO) down 9%.
The other FAANG stocks also closed down, with the exception of Netflix (NASDAQ:NFLX), which managed a gain of 1.3%.
And the concerns about global tech demand meant that the volatile chip stocks took it on the chin, with Advanced Micro Devices (NASDAQ:AMD) falling 9.5%, Micron (NASDAQ:MU) off 5.3% and Nvidia (NASDAQ:NVDA) losing 6%.
Elsewhere, the airlines struggled after Delta issued softer-than-expected unit revenue guidance. Delta Air Lines (NYSE:DAL) lost 9%, United Continental (NASDAQ:UAL) fell 5% and American Airlines (NASDAQ:AAL) sank 7.5%.
-- Reuters contributed to this report.