The Nasdaq Composite index fell about 2.5 percent on Monday, hit by a slump in Apple Inc shares after two suppliers cut their forecasts, sparking a selloff in other iPhone component makers and weighing on technology stocks.
Apple shares (AAPL.O) fell 4.4 percent to $195.40, their lowest since July 27, after Lumentum Holdings Inc (LITE.O), the main supplier for Face ID technology, and screen maker Japan Display Inc (6740.T) cut their forecasts.
The technology sector .SPLRCT, which has fueled much of the U.S. stock market’s bull run, fell 3.2 percent, while the Philadelphia SE Semiconductor index .SOX dropped 4.1 percent.
“These are growth stocks, any little bit of growth that goes away from the company, makes the company less desirable,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
“I don’t think this necessarily means that tech is being rejected by consumers, we may have expected too much in the way of new phone sales in the short-run.”
Earlier, a rebound in oil prices had offered some relief to energy stocks, but they succumbed to the broader selling pressure, with the S&P energy index .SPNY down 1.2 percent.
At 13:18 ET the Dow Jones Industrial Average .DJI was down 492.79 points, or 1.90 percent, at 25,496.51, the S&P 500 .SPX was down 45.77 points, or 1.65 percent, at 2,735.24 and the Nasdaq Composite .IXIC was down 188.37 points, or 2.54 percent, at 7,218.53.
A holiday in the U.S. bond markets for Veterans Day could keep trading volumes muted, analysts said.
“With the bond market closed, there is a lack of catalyst to push the market higher,” said Lindsey Bell, investment strategist at CFRA Research in New York.
Nine of the 11 major S&P sectors were lower, with slight gains seen in the defensive real estate .SPLRCR and utilities .SPLRCU sectors.
Goldman Sachs Group Inc (GS.N) fell 7.1 percent, the most on the Dow. Malaysia’s 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 dollars of deals for troubled state fund 1MDB, Bloomberg reported. (bloom.bg/2PZvGry)
The financial sector .SPSY declined 1.6 percent.
General Electric shares (GE.N) fell as much as 10 percent to below $8 for the first time since March 2009 after Chief Executive Officer Larry Culp said the company was saddled with too much debt and would urgently sell assets to reduce levels of leverage.
Declining issues outnumbered advancers for a 1.98-to-1 ratio on the NYSE and a 2.50-to-1 ratio on the Nasdaq.
The S&P index recorded 28 new 52-week highs and 10 new lows, while the Nasdaq recorded 17 new highs and 124 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta