Wall Street hit by Apple and Internet shares, trade worries
By Caroline Valetkevitch NEW YORK (Reuters) - The Nasdaq slumped nearly 3 percent and the Dow and S&P fell more than 1 percent on Monday as investors pulled out of Apple and internet shares, while conflicting signals over the state of play between the United States and China on their trade dispute added to caution. Shares of Apple Inc fell 3.5 percent after the Wall Street Journal reported the company had cut production orders in recent weeks for all three iPhone models launched in September.
By Caroline Valetkevitch
NEW YORK (Reuters) - The Nasdaq slumped nearly 3 percent and the Dow and S&P fell more than 1 percent on Monday as investors pulled out of Apple and internet shares, while conflicting signals over the state of play between the United States and China on their trade dispute added to caution.
Shares of Apple Inc
The iPhone maker's stock is now down about 20 percent from a record high in October following a disappointing holiday quarter sales forecast and weak outlooks from several suppliers. The S&P 500 technology index <.SPLRCT>, down 3.5 percent, led sector losses.
Other market leaders - including the 'FANG' stocks - also fell sharply, underscoring the view that their leadership was on shaky ground. Shares of Facebook
Since the FANG outperformance run peaked on Aug. 30, the group has underperformed the S&P 500 by 16.25 percent. That is their worst underperformance since the first half of 2014 when they underperformed by around 20 percent.
"You're seeing that rotation away from tech. Certainly the indexes are much more growth-oriented because of the sheer size of those companies now, and they dominate the indexes. You're going to have more underperformance of the growth names," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Over the weekend, Asia-Pacific leaders meeting in Papua New Guinea failed to agree on a communique for the first time, with U.S.-China trade worries on the forefront.
U.S. Vice President Mike Pence said in a blunt speech on Saturday the United States will not back down from its trade dispute with China unless Beijing bows to U.S. demands, dampening Friday's trade optimism that was fuelled by comments from President Donald Trump.
The Dow Jones Industrial Average <.DJI> fell 391.7 points, or 1.54 percent, to 25,021.52, the S&P 500 <.SPX> lost 41.9 points, or 1.53 percent, to 2,694.37 and the Nasdaq Composite <.IXIC> dropped 195.74 points, or 2.7 percent, to 7,052.14.
Comments by New York Fed President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches towards a more normal policy stance may have added pressure to stocks.
Some investors questioned whether the Fed will be able to continue raising interest rates, possibly harming growth.
Richard Clarida, the Fed's newly appointed vice chair, said on Friday that U.S. rates are nearing Fed estimates of a neutral rate, which "makes sense."
Shares of Apple suppliers were also hit, including Lumentum Holdings Inc
The Philadelphia SE Semiconductor index <.SOX>, which also includes some Apple suppliers, dropped 3.1 percent, extending losses from the previous session.
Trading volumes were thin in a holiday-shortened week ahead of Thanksgiving on Thursday and a shorter session on Friday which brings slight volatility to markets, traders said.
Declining issues outnumbered advancing ones on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 2.88-to-1 ratio favoured decliners.
The S&P 500 posted 26 new 52-week highs and 17 new lows; the Nasdaq Composite recorded 16 new highs and 140 new lows.
(Additional reporting by Medha Singh and Sruthi shankar in Bengaluru, Karen Brettell and Jennifer Ablan in New York; Editing by Arun Koyyur and James Dalgleish)
This story has not been edited by Firstpost staff and is generated by auto-feed.
U.S. home sales fall as tight supply boosts prices | Reuters
France, Germany to agree to NATO role against Islamic State - sources | Reuters
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
China's Xi says navy should become world class | Reuters
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.