Apple, Goldman Sachs send Wall Street tumbling

Apple, Goldman Sachs send Wall Street tumbling

NEW YORK,. Wall Street’s major indexes tumbled yesterday as shares of Apple Inc and Goldman Sachs Group Inc dragged down the technology and financial sectors.

With yesterday’s losses, all three indexes erased the gains from their brief rally after the US congressional elections on November 6.

Apple shares fell 5.0 per cent after several suppliers to the company, including Lumentum Holdings Inc, whose components power the iPhone’s Face ID technology, cut their forecasts. Apple’s decline impeded the tech-heavy Nasdaq, which fell more than 2 per cent.

Lumentum shares plunged 33 per cent. Shares of several chipmakers that sell to Apple, such as Cirrus Logic Inc, Qorvo Inc and Skyworks Solutions Inc, dropped as well. The Philadelphia SE Semiconductor index dropped 4.4 per cent.

“The concerns are all about global economic growth, specifically demands for the products of companies like Apple,” said Kate Warne, investment strategist at Edward Jones in St Louis. “Investors are becoming more concerned about faster-growing companies and whether they will continue to grow at that pace.”

Goldman Sachs shares dropped 7.5 per cent after Bloomberg reported that Malaysian Finance Minister Lim Guan Eng said the country was seeking a full refund of all the fees it paid to the Wall Street bank for arranging billions of US dollars of deals for troubled state fund 1MDB. Goldman Sachs was the biggest drag on the Dow, which fell more than 2 per cent.

Among the S&P 500’s 11 major sectors, technology and financial stocks weighed most heavily. The S&P 500 technology sector index fell 3.5 per cent, and the financial sector index fell 2.0 per cent.

Energy stocks also accelerated their decline toward the end of the session as oil prices fell.

“At the moment it seems the path of least resistance is down,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

The Dow Jones Industrial Average fell 602.12 points, or 2.32 per cent, to 25,387.18, the S&P 500 lost 54.79 points, or 1.97 per cent, to 2,726.22 and the Nasdaq Composite dropped 206.03 points, or 2.78 per cent, to 7,200.87.

A holiday in the US bond markets for Veterans Day kept trading volume muted. Volume on US exchanges was 7.30 billion shares, compared with the 8.41 billion average over the last 20 trading days.

General Electric Co shares fell 6.9 per cent after Chief Executive Officer Larry Culp said the company was saddled with too much debt and would urgently sell assets to reduce leverage. The shares dropped below US$8 (RM33.50) for the first time since March 2009.

Declining issues outnumbered advancing ones on the NYSE by a 2.80-to-1 ratio; on Nasdaq, a 3.64-to-1 ratio favoured decliners.

The S&P 500 posted 29 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 25 new highs and 161 new lows. — Reuters