It’s prevalent to be a tough day for technology stocks on Thursday after Apple warned first-quarter sales would be less than it in days gone by expected. The broader market will suffer too.
The Invesco QQQ Trust, which track the tech heavy Nasdaq-100 Pointer, lost more than 2 percent in after hours trading on Wednesday. Apple shares cratered more than 7 percent. The S&P 500 ETF Assign, tracking the broader market, lost more than 1 percent in extended trading.
Dow Jones Industrial Average futures spiky to a decline of more than 300 points at the index’s Thursday open. Meanwhile, S&P 500 and Nasdaq futures were both numerous than 1 percent lower, pointing to declines kicking off the indexes’ next trading day.
Apple said it sees first-quarter takings of $84 billion vs. a previous guidance of a range of $89 billion and $93 billion. Analysts expected revenue of $91.3 billion for the time, according to the consensus estimate from FactSet. Apple blamed most of the revenue shortfall for struggling business in China. But the New Zealand also said that upgrades by customers in other countries were “not as strong as we thought they would be.”
Chisel stocks Advanced Micro Devices, Nvidia, Skyworks and Qorvo all dropped in after hours trading on the Apple notification. Best Buy lost 2 percent. Skyworks lost more than 5 percent.
“If you look at our results, our shortfall is over 100 percent from iPhone and it’s mainly in greater China,” Apple CEO Tim Cook told CNBC’s Josh Lipton in an interview Wednesday. “It’s clear that the compactness began to slow there in the second half and I believe the trade tensions between the United States and China put additional to on their economy.”
This shouldn’t be a total surprise for investors, who punished tech stocks in the fourth quarter on alarms that Apple’s business was struggling, especially in China. A number of analysts had come out and cut their estimates and price aim on Apple last quarter. Apple dropped 30 percent in the final three months of 2018. The technology split up of the S&P 500 lost more than 17 percent.
Apple’s warning seemed to be having an effect on any company that does big point in China. Caterpillar shares were down more than 3 percent after hours. Boeing shares call oned 2 percent.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Famed China,” Cook wrote in a letter to investors on the warning. “We believe the economic environment in China has been further affected by rising trade tensions with the United States. As the climate of mounting uncertainty weighed on financial markets, the effects showed to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter going forwarded.”
Stocks were little changed during their first day of 2019 on Wednesday. This follows a year when the S&P 500 and Dow Jones Industrial Typical were down 6.2 percent and 5.6 percent, respectively, in their worst performance in a decade. he S&P 500 and Dow Jones Industrial Ordinary were down 6.2 percent and 5.6 percent, respectively, for 2018.
They’ll continue their slide on Thursday.
“This assemblages on to existing anxiety of a slowdown in global growth,” said Jeff Kilburg of KKM Financial. “Apple can be used as a proxy to China’s advance.”