Tech giants slide, pulling USA stock market sharply lower

Darnell Taylor
November 14, 2018

Wall Street slid lower in the afternoon to finish in the red.

FINANCIALS SLIDE: Banks and other financial companies also took heavy losses.

With Monday's losses, all 3 indexes erased the gains from their brief rally after the USA congressional elections on November 6.

TECH TUMBLE: Apple tumbled 4.2 percent to $195.97 after Wells Fargo analysts said the iPhone maker is the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. Shares in Lumentum plunged 33 percent to $37.50. Shares of several chipmakers that sell to Apple, such as Cirrus Logic, Qorvo Inc and Skyworks Solutions, dropped as well. Apple slumped 5 percent, Amazon dropped 4.4 percent and Goldman Sachs gave up 7.5 percent.

"With the news out of the Apple supplier this morning, you have the market overall questioning the growth trajectory as we look out to 2019, " said Lindsey Bell, investment strategist at CFRA. "Investors are becoming more concerned about faster-growing companies and whether they will continue to grow at that pace". The Malaysian government is seeking a full refund of fees it paid to the investment bank as part of deals related to the scandal, after Goldman "admitted culpability", according to a report from Bloomberg on Monday.

ASIA'S DAY: Tokyo's Nikkei 225 fell 2 percent to 21,810.52 while the Shanghai Composite Index rose 0.9 percent to 2,654.88. Stocks appeared to have regained their footing after a skid in October snapped a six-month string of gains for the S&P 500. The S&P 500 fell 54.79 points, or 1.97 percent, to 2,726.22. And Iranian oil sanctions recently kicked in that should theoretically also reduce the global supply of oil, boosting prices of what is available.

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The Nasdaq Composite fell 2.8%, while the Dow Jones Industrial Average was lower by 2.3%, or 602 points.

Stocks attempted to bounce earlier in the session amid reports of renewed trade talks between the USA and China. Volume on United States 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 percent 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 favored decliners.

Ten of the 11 primary S&P 500 sectors closed lower, with technology and consumer discretionary down 3.54 percent and 2.31 percent, respectively, leading the laggards.

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